Correlation Between Fubon MSCI and Simple Mart
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Simple Mart 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 Simple Mart 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 Simple Mart Retail, you can compare the effects of market volatilities on Fubon MSCI and Simple Mart 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 Simple Mart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Simple Mart.
Diversification Opportunities for Fubon MSCI and Simple Mart
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and Simple is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Simple Mart Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simple Mart Retail 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 Simple Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simple Mart Retail has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Simple Mart go up and down completely randomly.
Pair Corralation between Fubon MSCI and Simple Mart
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 0.97 times more return on investment than Simple Mart. However, Fubon MSCI Taiwan is 1.03 times less risky than Simple Mart. It trades about 0.09 of its potential returns per unit of risk. Simple Mart Retail is currently generating about 0.0 per unit of risk. If you would invest 8,190 in Fubon MSCI Taiwan on August 30, 2024 and sell it today you would earn a total of 5,625 from holding Fubon MSCI Taiwan or generate 68.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. Simple Mart Retail
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Simple Mart Retail |
Fubon MSCI and Simple Mart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Simple Mart
The main advantage of trading using opposite Fubon MSCI and Simple Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Simple Mart 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 Simple Mart will offset losses from the drop in Simple Mart'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 |
| Simple Mart vs. Taiwan Semiconductor Manufacturing | Simple Mart vs. Hon Hai Precision | Simple Mart vs. MediaTek | Simple Mart vs. Chunghwa Telecom Co |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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