Correlation Between Fubon MSCI and Winbond Electronics
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Winbond Electronics 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 Winbond Electronics 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 Winbond Electronics Corp, you can compare the effects of market volatilities on Fubon MSCI and Winbond Electronics 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 Winbond Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Winbond Electronics.
Diversification Opportunities for Fubon MSCI and Winbond Electronics
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and Winbond is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Winbond Electronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winbond Electronics Corp 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 Winbond Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winbond Electronics Corp has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Winbond Electronics go up and down completely randomly.
Pair Corralation between Fubon MSCI and Winbond Electronics
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 0.57 times more return on investment than Winbond Electronics. However, Fubon MSCI Taiwan is 1.76 times less risky than Winbond Electronics. It trades about 0.05 of its potential returns per unit of risk. Winbond Electronics Corp is currently generating about -0.23 per unit of risk. If you would invest 14,400 in Fubon MSCI Taiwan on October 26, 2024 and sell it today you would earn a total of 490.00 from holding Fubon MSCI Taiwan or generate 3.4% 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. Winbond Electronics Corp
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Winbond Electronics Corp |
Fubon MSCI and Winbond Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Winbond Electronics
The main advantage of trading using opposite Fubon MSCI and Winbond Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Winbond Electronics 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 Winbond Electronics will offset losses from the drop in Winbond Electronics' 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 |
| Winbond Electronics vs. Macronix International Co | Winbond Electronics vs. United Microelectronics | Winbond Electronics vs. Mosel Vitelic | Winbond Electronics vs. Nanya Technology 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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