Correlation Between Fubon MSCI and King Chou
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and King Chou 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 King Chou 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 King Chou Marine, you can compare the effects of market volatilities on Fubon MSCI and King Chou 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 King Chou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and King Chou.
Diversification Opportunities for Fubon MSCI and King Chou
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fubon and King is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and King Chou Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on King Chou Marine 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 King Chou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of King Chou Marine has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and King Chou go up and down completely randomly.
Pair Corralation between Fubon MSCI and King Chou
Assuming the 90 days trading horizon Fubon MSCI is expected to generate 5.95 times less return on investment than King Chou. In addition to that, Fubon MSCI is 1.12 times more volatile than King Chou Marine. It trades about 0.04 of its total potential returns per unit of risk. King Chou Marine is currently generating about 0.24 per unit of volatility. If you would invest 3,975 in King Chou Marine on September 14, 2024 and sell it today you would earn a total of 215.00 from holding King Chou Marine or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. King Chou Marine
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| King Chou Marine |
Fubon MSCI and King Chou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and King Chou
The main advantage of trading using opposite Fubon MSCI and King Chou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, King Chou 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 King Chou will offset losses from the drop in King Chou'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 |
| King Chou vs. Dadi Early Childhood Education | King Chou vs. Weltrend Semiconductor | King Chou vs. Min Aik Technology | King Chou vs. Vate Technology 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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