Correlation Between Fubon MSCI and Tatung
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Tatung 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 Tatung 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 Tatung Co, you can compare the effects of market volatilities on Fubon MSCI and Tatung 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 Tatung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Tatung.
Diversification Opportunities for Fubon MSCI and Tatung
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and Tatung is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Tatung Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tatung 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 Tatung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tatung has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Tatung go up and down completely randomly.
Pair Corralation between Fubon MSCI and Tatung
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 0.72 times more return on investment than Tatung. However, Fubon MSCI Taiwan is 1.38 times less risky than Tatung. It trades about 0.03 of its potential returns per unit of risk. Tatung Co is currently generating about -0.07 per unit of risk. If you would invest 14,430 in Fubon MSCI Taiwan on October 22, 2024 and sell it today you would earn a total of 95.00 from holding Fubon MSCI Taiwan or generate 0.66% 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. Tatung Co
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Tatung |
Fubon MSCI and Tatung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Tatung
The main advantage of trading using opposite Fubon MSCI and Tatung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Tatung 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 Tatung will offset losses from the drop in Tatung'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 |
| Tatung vs. Qisda Corp | Tatung vs. Winbond Electronics Corp | Tatung vs. Compal Electronics | Tatung vs. Inventec 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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