Correlation Between Fubon MSCI and China Man
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and China Man 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 China Man 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 China Man Made Fiber, you can compare the effects of market volatilities on Fubon MSCI and China Man 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 China Man. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and China Man.
Diversification Opportunities for Fubon MSCI and China Man
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and China is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and China Man Made Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Man Made 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 China Man. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Man Made has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and China Man go up and down completely randomly.
Pair Corralation between Fubon MSCI and China Man
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to under-perform the China Man. In addition to that, Fubon MSCI is 1.08 times more volatile than China Man Made Fiber. It trades about -0.06 of its total potential returns per unit of risk. China Man Made Fiber is currently generating about 0.3 per unit of volatility. If you would invest 782.00 in China Man Made Fiber on August 27, 2024 and sell it today you would earn a total of 56.00 from holding China Man Made Fiber or generate 7.16% 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. China Man Made Fiber
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| China Man Made |
Fubon MSCI and China Man Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and China Man
The main advantage of trading using opposite Fubon MSCI and China Man positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, China Man 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 China Man will offset losses from the drop in China Man'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 |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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