Correlation Between Fubon MSCI and Jean
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Jean 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 Jean 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 Jean Co, you can compare the effects of market volatilities on Fubon MSCI and Jean 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 Jean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Jean.
Diversification Opportunities for Fubon MSCI and Jean
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fubon and Jean is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Jean Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jean 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 Jean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jean has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Jean go up and down completely randomly.
Pair Corralation between Fubon MSCI and Jean
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to under-perform the Jean. But the etf apears to be less risky and, when comparing its historical volatility, Fubon MSCI Taiwan is 1.96 times less risky than Jean. The etf trades about -0.13 of its potential returns per unit of risk. The Jean Co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,365 in Jean Co on September 3, 2024 and sell it today you would earn a total of 200.00 from holding Jean Co or generate 8.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. Jean Co
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Jean |
Fubon MSCI and Jean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Jean
The main advantage of trading using opposite Fubon MSCI and Jean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Jean 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 Jean will offset losses from the drop in Jean's long position.| Fubon MSCI vs. Cathay Taiwan 5G | Fubon MSCI vs. Ruentex Development Co | Fubon MSCI vs. Symtek Automation Asia | Fubon MSCI vs. CTCI Corp |
| Jean vs. Tainan Spinning Co | Jean vs. Chia Her Industrial | Jean vs. WiseChip Semiconductor | Jean vs. Novatek Microelectronics 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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