Correlation Between Fubon MSCI and Song Ho
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Song Ho 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 Song Ho 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 Song Ho Industrial, you can compare the effects of market volatilities on Fubon MSCI and Song Ho 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 Song Ho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Song Ho.
Diversification Opportunities for Fubon MSCI and Song Ho
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and Song is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Song Ho Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Song Ho 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 Song Ho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Song Ho Industrial has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Song Ho go up and down completely randomly.
Pair Corralation between Fubon MSCI and Song Ho
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 1.96 times more return on investment than Song Ho. However, Fubon MSCI is 1.96 times more volatile than Song Ho Industrial. It trades about 0.09 of its potential returns per unit of risk. Song Ho Industrial is currently generating about -0.01 per unit of risk. If you would invest 9,365 in Fubon MSCI Taiwan on September 2, 2024 and sell it today you would earn a total of 4,400 from holding Fubon MSCI Taiwan or generate 46.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. Song Ho Industrial
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Song Ho Industrial |
Fubon MSCI and Song Ho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Song Ho
The main advantage of trading using opposite Fubon MSCI and Song Ho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Song Ho 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 Song Ho will offset losses from the drop in Song Ho's long position.| Fubon MSCI vs. Yuanta Daily Taiwan | Fubon MSCI vs. Yuanta Daily CSI | Fubon MSCI vs. Fubon FTSE Vietnam | Fubon MSCI vs. Fuh Hwa Emerging |
| Song Ho vs. Elite Semiconductor Memory | Song Ho vs. Founding Construction Development | Song Ho vs. uPI Semiconductor Corp | Song Ho vs. Hung Sheng Construction |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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