Correlation Between Fubon MSCI and Klingon Aerospace
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Klingon Aerospace 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 Klingon Aerospace 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 Klingon Aerospace, you can compare the effects of market volatilities on Fubon MSCI and Klingon Aerospace 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 Klingon Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Klingon Aerospace.
Diversification Opportunities for Fubon MSCI and Klingon Aerospace
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fubon and Klingon is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Klingon Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klingon Aerospace 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 Klingon Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klingon Aerospace has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Klingon Aerospace go up and down completely randomly.
Pair Corralation between Fubon MSCI and Klingon Aerospace
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 0.63 times more return on investment than Klingon Aerospace. However, Fubon MSCI Taiwan is 1.59 times less risky than Klingon Aerospace. It trades about 0.08 of its potential returns per unit of risk. Klingon Aerospace is currently generating about -0.05 per unit of risk. If you would invest 11,100 in Fubon MSCI Taiwan on September 1, 2024 and sell it today you would earn a total of 2,665 from holding Fubon MSCI Taiwan or generate 24.01% 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. Klingon Aerospace
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Klingon Aerospace |
Fubon MSCI and Klingon Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Klingon Aerospace
The main advantage of trading using opposite Fubon MSCI and Klingon Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Klingon Aerospace 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 Klingon Aerospace will offset losses from the drop in Klingon Aerospace's long position.| Fubon MSCI vs. Yuanta Daily Taiwan | Fubon MSCI vs. Yuanta Daily CSI | Fubon MSCI vs. Fubon FTSE Vietnam | Fubon MSCI vs. Fuh Hwa Emerging |
| Klingon Aerospace vs. BES Engineering Co | Klingon Aerospace vs. Continental Holdings Corp | Klingon Aerospace vs. Kee Tai Properties | Klingon Aerospace vs. Hung Sheng Construction |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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