Correlation Between Fubon MSCI and Acelon Chemicals
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Acelon Chemicals 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 Acelon Chemicals 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 Acelon Chemicals Fiber, you can compare the effects of market volatilities on Fubon MSCI and Acelon Chemicals 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 Acelon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Acelon Chemicals.
Diversification Opportunities for Fubon MSCI and Acelon Chemicals
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fubon and Acelon is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Acelon Chemicals Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acelon Chemicals Fiber 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 Acelon Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acelon Chemicals Fiber has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Acelon Chemicals go up and down completely randomly.
Pair Corralation between Fubon MSCI and Acelon Chemicals
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to under-perform the Acelon Chemicals. But the etf apears to be less risky and, when comparing its historical volatility, Fubon MSCI Taiwan is 3.73 times less risky than Acelon Chemicals. The etf trades about -0.07 of its potential returns per unit of risk. The Acelon Chemicals Fiber is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,280 in Acelon Chemicals Fiber on August 30, 2024 and sell it today you would earn a total of 125.00 from holding Acelon Chemicals Fiber or generate 9.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. Acelon Chemicals Fiber
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Acelon Chemicals Fiber |
Fubon MSCI and Acelon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Acelon Chemicals
The main advantage of trading using opposite Fubon MSCI and Acelon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Acelon Chemicals 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 Acelon Chemicals will offset losses from the drop in Acelon Chemicals' long position.| Fubon MSCI vs. Yuanta Daily Taiwan | Fubon MSCI vs. Symtek Automation Asia | Fubon MSCI vs. CTCI Corp | Fubon MSCI vs. Information Technology Total |
| Acelon Chemicals vs. Yulon Finance Corp | Acelon Chemicals vs. Taiwan Secom Co | Acelon Chemicals vs. Great Wall Enterprise |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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