Correlation Between Fubon MSCI and Kingstate Electronics
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Kingstate Electronics 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 Kingstate Electronics 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 Kingstate Electronics, you can compare the effects of market volatilities on Fubon MSCI and Kingstate Electronics 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 Kingstate Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Kingstate Electronics.
Diversification Opportunities for Fubon MSCI and Kingstate Electronics
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and Kingstate is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Kingstate Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingstate Electronics 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 Kingstate Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingstate Electronics has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Kingstate Electronics go up and down completely randomly.
Pair Corralation between Fubon MSCI and Kingstate Electronics
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 0.61 times more return on investment than Kingstate Electronics. However, Fubon MSCI Taiwan is 1.63 times less risky than Kingstate Electronics. It trades about -0.15 of its potential returns per unit of risk. Kingstate Electronics is currently generating about -0.3 per unit of risk. If you would invest 14,445 in Fubon MSCI Taiwan on August 24, 2024 and sell it today you would lose (545.00) from holding Fubon MSCI Taiwan or give up 3.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. Kingstate Electronics
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Kingstate Electronics |
Fubon MSCI and Kingstate Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Kingstate Electronics
The main advantage of trading using opposite Fubon MSCI and Kingstate Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Kingstate Electronics 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 Kingstate Electronics will offset losses from the drop in Kingstate Electronics' long position.| Fubon MSCI vs. Yuanta Daily Taiwan | Fubon MSCI vs. Cathay Taiwan 5G | Fubon MSCI vs. Yuanta Daily CSI | Fubon MSCI vs. Cathay Sustainability High |
| Kingstate Electronics vs. Hon Hai Precision | Kingstate Electronics vs. Delta Electronics | Kingstate Electronics vs. LARGAN Precision Co | Kingstate Electronics vs. E Ink Holdings |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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