Correlation Between Fubon MSCI and Ta Ya
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Ta Ya 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 Ta Ya 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 Ta Ya Electric, you can compare the effects of market volatilities on Fubon MSCI and Ta Ya 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 Ta Ya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Ta Ya.
Diversification Opportunities for Fubon MSCI and Ta Ya
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and 1609 is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Ta Ya Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ta Ya Electric 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 Ta Ya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ta Ya Electric has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Ta Ya go up and down completely randomly.
Pair Corralation between Fubon MSCI and Ta Ya
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to under-perform the Ta Ya. But the etf apears to be less risky and, when comparing its historical volatility, Fubon MSCI Taiwan is 1.36 times less risky than Ta Ya. The etf trades about -0.1 of its potential returns per unit of risk. The Ta Ya Electric is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,100 in Ta Ya Electric on December 11, 2024 and sell it today you would earn a total of 120.00 from holding Ta Ya Electric or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. Ta Ya Electric
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Ta Ya Electric |
Fubon MSCI and Ta Ya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Ta Ya
The main advantage of trading using opposite Fubon MSCI and Ta Ya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Ta Ya 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 Ta Ya will offset losses from the drop in Ta Ya'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 |
| Ta Ya vs. Walsin Lihwa Corp | Ta Ya vs. Hua Eng Wire | Ta Ya vs. Hong Tai Electric | Ta Ya vs. Chung Hsin Electric Machinery |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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