Correlation Between Fubon MSCI and Ta Liang
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Ta Liang 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 Ta Liang 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 Ta Liang Technology, you can compare the effects of market volatilities on Fubon MSCI and Ta Liang 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 Ta Liang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Ta Liang.
Diversification Opportunities for Fubon MSCI and Ta Liang
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fubon and 3167 is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Ta Liang Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ta Liang Technology 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 Ta Liang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ta Liang Technology has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Ta Liang go up and down completely randomly.
Pair Corralation between Fubon MSCI and Ta Liang
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 0.29 times more return on investment than Ta Liang. However, Fubon MSCI Taiwan is 3.49 times less risky than Ta Liang. It trades about -0.13 of its potential returns per unit of risk. Ta Liang Technology is currently generating about -0.31 per unit of risk. If you would invest 14,185 in Fubon MSCI Taiwan on September 3, 2024 and sell it today you would lose (420.00) from holding Fubon MSCI Taiwan or give up 2.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. Ta Liang Technology
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Ta Liang Technology |
Fubon MSCI and Ta Liang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Ta Liang
The main advantage of trading using opposite Fubon MSCI and Ta Liang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Ta Liang 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 Ta Liang will offset losses from the drop in Ta Liang'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 |
| Ta Liang vs. Highlight Tech | Ta Liang vs. WiseChip Semiconductor | Ta Liang vs. Novatek Microelectronics Corp | Ta Liang vs. Leader Electronics |
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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