Correlation Between Fubon MSCI and Chernan Metal
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Chernan Metal 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 Chernan Metal 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 Chernan Metal Industrial, you can compare the effects of market volatilities on Fubon MSCI and Chernan Metal 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 Chernan Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Chernan Metal.
Diversification Opportunities for Fubon MSCI and Chernan Metal
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fubon and Chernan is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Chernan Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chernan Metal Industrial 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 Chernan Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chernan Metal Industrial has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Chernan Metal go up and down completely randomly.
Pair Corralation between Fubon MSCI and Chernan Metal
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 0.45 times more return on investment than Chernan Metal. However, Fubon MSCI Taiwan is 2.21 times less risky than Chernan Metal. It trades about -0.15 of its potential returns per unit of risk. Chernan Metal Industrial is currently generating about -0.12 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. Chernan Metal Industrial
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Chernan Metal Industrial |
Fubon MSCI and Chernan Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Chernan Metal
The main advantage of trading using opposite Fubon MSCI and Chernan Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Chernan Metal 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 Chernan Metal will offset losses from the drop in Chernan Metal's 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 |
| Chernan Metal vs. Catcher Technology Co | Chernan Metal vs. Solar Applied Materials | Chernan Metal vs. Evergreen Steel Corp | Chernan Metal vs. Shin Zu Shing |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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