Correlation Between Fubon MSCI and Hung Ching
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Hung Ching 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 Hung Ching 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 Hung Ching Development, you can compare the effects of market volatilities on Fubon MSCI and Hung Ching 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 Hung Ching. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Hung Ching.
Diversification Opportunities for Fubon MSCI and Hung Ching
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and Hung is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Hung Ching Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hung Ching Development 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 Hung Ching. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hung Ching Development has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Hung Ching go up and down completely randomly.
Pair Corralation between Fubon MSCI and Hung Ching
Assuming the 90 days trading horizon Fubon MSCI is expected to generate 1.2 times less return on investment than Hung Ching. But when comparing it to its historical volatility, Fubon MSCI Taiwan is 1.81 times less risky than Hung Ching. It trades about 0.1 of its potential returns per unit of risk. Hung Ching Development is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,150 in Hung Ching Development on September 3, 2024 and sell it today you would earn a total of 1,635 from holding Hung Ching Development or generate 76.05% 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. Hung Ching Development
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Hung Ching Development |
Fubon MSCI and Hung Ching Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Hung Ching
The main advantage of trading using opposite Fubon MSCI and Hung Ching positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Hung Ching 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 Hung Ching will offset losses from the drop in Hung Ching'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 |
| Hung Ching vs. Huaku Development Co | Hung Ching vs. Ruentex Development Co | Hung Ching vs. Taiwan Cement Corp | Hung Ching vs. Symtek Automation Asia |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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