Correlation Between Fubon MSCI and Data International
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Data International 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 Data International 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 Data International Co, you can compare the effects of market volatilities on Fubon MSCI and Data International 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 Data International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Data International.
Diversification Opportunities for Fubon MSCI and Data International
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fubon and Data is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Data International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data International 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 Data International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data International has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Data International go up and down completely randomly.
Pair Corralation between Fubon MSCI and Data International
Assuming the 90 days trading horizon Fubon MSCI is expected to generate 3.76 times less return on investment than Data International. But when comparing it to its historical volatility, Fubon MSCI Taiwan is 3.32 times less risky than Data International. It trades about 0.1 of its potential returns per unit of risk. Data International Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,916 in Data International Co on September 3, 2024 and sell it today you would earn a total of 13,784 from holding Data International Co or generate 472.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. Data International Co
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Data International |
Fubon MSCI and Data International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Data International
The main advantage of trading using opposite Fubon MSCI and Data International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Data International 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 Data International will offset losses from the drop in Data International'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 |
| Data International vs. Hon Hai Precision | Data International vs. Delta Electronics | Data International vs. LARGAN Precision Co | Data International vs. AU Optronics |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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