Correlation Between Fubon MSCI and Taisun Enterprise
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Taisun Enterprise at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Fubon MSCI and Taisun Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fubon MSCI Taiwan and Taisun Enterprise Co, you can compare the effects of market volatilities on Fubon MSCI and Taisun Enterprise 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 Taisun Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Taisun Enterprise.
Diversification Opportunities for Fubon MSCI and Taisun Enterprise
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fubon and Taisun is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Taisun Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taisun Enterprise 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 Taisun Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taisun Enterprise has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Taisun Enterprise go up and down completely randomly.
Pair Corralation between Fubon MSCI and Taisun Enterprise
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 1.68 times more return on investment than Taisun Enterprise. However, Fubon MSCI is 1.68 times more volatile than Taisun Enterprise Co. It trades about 0.1 of its potential returns per unit of risk. Taisun Enterprise Co is currently generating about -0.14 per unit of risk. If you would invest 14,520 in Fubon MSCI Taiwan on October 26, 2024 and sell it today you would earn a total of 370.00 from holding Fubon MSCI Taiwan or generate 2.55% 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. Taisun Enterprise Co
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Taisun Enterprise |
Fubon MSCI and Taisun Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Taisun Enterprise
The main advantage of trading using opposite Fubon MSCI and Taisun Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Taisun Enterprise 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 Taisun Enterprise will offset losses from the drop in Taisun Enterprise's long position.| Fubon MSCI vs. Fubon Hang Seng | Fubon MSCI vs. Fubon SP Preferred | Fubon MSCI vs. Fubon NASDAQ 100 1X | Fubon MSCI vs. Fubon TWSE Corporate |
| Taisun Enterprise vs. AGV Products Corp | Taisun Enterprise vs. Wei Chuan Foods | Taisun Enterprise vs. Chia Hsin Cement | Taisun Enterprise vs. Grand Pacific Petrochemical |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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