Correlation Between Fubon MSCI and SanDi Properties
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and SanDi Properties 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 SanDi Properties 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 SanDi Properties Co, you can compare the effects of market volatilities on Fubon MSCI and SanDi Properties 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 SanDi Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and SanDi Properties.
Diversification Opportunities for Fubon MSCI and SanDi Properties
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fubon and SanDi is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and SanDi Properties Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SanDi Properties 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 SanDi Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SanDi Properties has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and SanDi Properties go up and down completely randomly.
Pair Corralation between Fubon MSCI and SanDi Properties
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 0.53 times more return on investment than SanDi Properties. However, Fubon MSCI Taiwan is 1.89 times less risky than SanDi Properties. It trades about 0.0 of its potential returns per unit of risk. SanDi Properties Co is currently generating about -0.09 per unit of risk. If you would invest 13,980 in Fubon MSCI Taiwan on August 28, 2024 and sell it today you would lose (10.00) from holding Fubon MSCI Taiwan or give up 0.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. SanDi Properties Co
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| SanDi Properties |
Fubon MSCI and SanDi Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and SanDi Properties
The main advantage of trading using opposite Fubon MSCI and SanDi Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, SanDi Properties 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 SanDi Properties will offset losses from the drop in SanDi Properties' long position.The idea behind Fubon MSCI Taiwan and SanDi Properties Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SanDi Properties vs. Sunny Friend Environmental | SanDi Properties vs. TTET Union Corp | SanDi Properties vs. ECOVE Environment Corp | SanDi Properties vs. Yulon Finance Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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