Correlation Between Fubon MSCI and Shinkong Insurance
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Shinkong Insurance 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 Shinkong Insurance 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 Shinkong Insurance Co, you can compare the effects of market volatilities on Fubon MSCI and Shinkong Insurance 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 Shinkong Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Shinkong Insurance.
Diversification Opportunities for Fubon MSCI and Shinkong Insurance
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fubon and Shinkong is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Shinkong Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinkong Insurance 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 Shinkong Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinkong Insurance has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Shinkong Insurance go up and down completely randomly.
Pair Corralation between Fubon MSCI and Shinkong Insurance
Assuming the 90 days trading horizon Fubon MSCI is expected to generate 1.61 times less return on investment than Shinkong Insurance. But when comparing it to its historical volatility, Fubon MSCI Taiwan is 1.16 times less risky than Shinkong Insurance. It trades about 0.08 of its potential returns per unit of risk. Shinkong Insurance Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 7,020 in Shinkong Insurance Co on September 1, 2024 and sell it today you would earn a total of 2,980 from holding Shinkong Insurance Co or generate 42.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. Shinkong Insurance Co
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Shinkong Insurance |
Fubon MSCI and Shinkong Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Shinkong Insurance
The main advantage of trading using opposite Fubon MSCI and Shinkong Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Shinkong Insurance 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 Shinkong Insurance will offset losses from the drop in Shinkong Insurance's long position.| Fubon MSCI vs. Yuanta Daily Taiwan | Fubon MSCI vs. Yuanta Daily CSI | Fubon MSCI vs. Fubon FTSE Vietnam | Fubon MSCI vs. Fuh Hwa Emerging |
| Shinkong Insurance vs. Central Reinsurance Corp | Shinkong Insurance vs. Huaku Development Co | Shinkong Insurance vs. Fubon Financial Holding |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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