Correlation Between Fubon MSCI and Grand Ocean
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Grand Ocean 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 Grand Ocean 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 Grand Ocean Retail, you can compare the effects of market volatilities on Fubon MSCI and Grand Ocean 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 Grand Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Grand Ocean.
Diversification Opportunities for Fubon MSCI and Grand Ocean
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fubon and Grand is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Grand Ocean Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Ocean Retail 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 Grand Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Ocean Retail has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Grand Ocean go up and down completely randomly.
Pair Corralation between Fubon MSCI and Grand Ocean
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 0.54 times more return on investment than Grand Ocean. However, Fubon MSCI Taiwan is 1.86 times less risky than Grand Ocean. It trades about 0.1 of its potential returns per unit of risk. Grand Ocean Retail is currently generating about -0.03 per unit of risk. If you would invest 8,185 in Fubon MSCI Taiwan on August 28, 2024 and sell it today you would earn a total of 5,995 from holding Fubon MSCI Taiwan or generate 73.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. Grand Ocean Retail
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Grand Ocean Retail |
Fubon MSCI and Grand Ocean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Grand Ocean
The main advantage of trading using opposite Fubon MSCI and Grand Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Grand Ocean 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 Grand Ocean will offset losses from the drop in Grand Ocean'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 |
| Grand Ocean vs. Taiwan Semiconductor Manufacturing | Grand Ocean vs. Hon Hai Precision | Grand Ocean vs. MediaTek | Grand Ocean vs. Chunghwa Telecom 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
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| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
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| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |