Correlation Between Fubon MSCI and Tze Shin
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Tze Shin 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 Tze Shin 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 Tze Shin International, you can compare the effects of market volatilities on Fubon MSCI and Tze Shin 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 Tze Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Tze Shin.
Diversification Opportunities for Fubon MSCI and Tze Shin
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and Tze is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Tze Shin International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tze Shin International 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 Tze Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tze Shin International has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Tze Shin go up and down completely randomly.
Pair Corralation between Fubon MSCI and Tze Shin
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to under-perform the Tze Shin. But the etf apears to be less risky and, when comparing its historical volatility, Fubon MSCI Taiwan is 1.27 times less risky than Tze Shin. The etf trades about -0.06 of its potential returns per unit of risk. The Tze Shin International is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,325 in Tze Shin International on August 27, 2024 and sell it today you would lose (30.00) from holding Tze Shin International or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. Tze Shin International
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Tze Shin International |
Fubon MSCI and Tze Shin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Tze Shin
The main advantage of trading using opposite Fubon MSCI and Tze Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Tze Shin 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 Tze Shin will offset losses from the drop in Tze Shin'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 |
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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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