Correlation Between Fubon MSCI and U Ming
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and U Ming 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 U Ming 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 U Ming Marine Transport, you can compare the effects of market volatilities on Fubon MSCI and U Ming 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 U Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and U Ming.
Diversification Opportunities for Fubon MSCI and U Ming
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fubon and 2606 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and U Ming Marine Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Ming Marine 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 U Ming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Ming Marine has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and U Ming go up and down completely randomly.
Pair Corralation between Fubon MSCI and U Ming
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to under-perform the U Ming. In addition to that, Fubon MSCI is 1.04 times more volatile than U Ming Marine Transport. It trades about -0.05 of its total potential returns per unit of risk. U Ming Marine Transport is currently generating about 0.42 per unit of volatility. If you would invest 5,520 in U Ming Marine Transport on August 28, 2024 and sell it today you would earn a total of 590.00 from holding U Ming Marine Transport or generate 10.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. U Ming Marine Transport
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| U Ming Marine |
Fubon MSCI and U Ming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and U Ming
The main advantage of trading using opposite Fubon MSCI and U Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, U Ming 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 U Ming will offset losses from the drop in U Ming's long position.The idea behind Fubon MSCI Taiwan and U Ming Marine Transport pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| U Ming vs. Sunny Friend Environmental | U Ming vs. TTET Union Corp | U Ming vs. ECOVE Environment Corp | U Ming vs. Yulon Finance 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |