Correlation Between Fubon MSCI and Capital BofA
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By analyzing existing cross correlation between Fubon MSCI Taiwan and Capital BofA Merrill, you can compare the effects of market volatilities on Fubon MSCI and Capital BofA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Fubon MSCI with a short position of Capital BofA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Capital BofA.
Diversification Opportunities for Fubon MSCI and Capital BofA
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fubon and Capital is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Capital BofA Merrill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital BofA Merrill and Fubon MSCI is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Fubon MSCI Taiwan are associated (or correlated) with Capital BofA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital BofA Merrill has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Capital BofA go up and down completely randomly.
Pair Corralation between Fubon MSCI and Capital BofA
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 3.02 times more return on investment than Capital BofA. However, Fubon MSCI is 3.02 times more volatile than Capital BofA Merrill. It trades about 0.12 of its potential returns per unit of risk. Capital BofA Merrill is currently generating about 0.11 per unit of risk. If you would invest 9,635 in Fubon MSCI Taiwan on September 5, 2024 and sell it today you would earn a total of 4,630 from holding Fubon MSCI Taiwan or generate 48.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. Capital BofA Merrill
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Capital BofA Merrill |
Fubon MSCI and Capital BofA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Capital BofA
The main advantage of trading using opposite Fubon MSCI and Capital BofA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Capital BofA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Capital BofA will offset losses from the drop in Capital BofA's long position.| Fubon MSCI vs. Ruentex Development Co | Fubon MSCI vs. Symtek Automation Asia | Fubon MSCI vs. CTCI Corp | Fubon MSCI vs. Information Technology Total |
| Capital BofA vs. Ruentex Development Co | Capital BofA vs. Symtek Automation Asia | Capital BofA vs. CTCI Corp | Capital BofA vs. Information Technology Total |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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