Correlation Between Fubon MSCI and Welldone
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Welldone 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 Welldone 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 Welldone Co, you can compare the effects of market volatilities on Fubon MSCI and Welldone 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 Welldone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Welldone.
Diversification Opportunities for Fubon MSCI and Welldone
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fubon and Welldone is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Welldone Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Welldone 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 Welldone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Welldone has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Welldone go up and down completely randomly.
Pair Corralation between Fubon MSCI and Welldone
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to under-perform the Welldone. But the etf apears to be less risky and, when comparing its historical volatility, Fubon MSCI Taiwan is 1.36 times less risky than Welldone. The etf trades about -0.03 of its potential returns per unit of risk. The Welldone Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,850 in Welldone Co on September 13, 2024 and sell it today you would earn a total of 150.00 from holding Welldone Co or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. Welldone Co
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Welldone |
Fubon MSCI and Welldone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Welldone
The main advantage of trading using opposite Fubon MSCI and Welldone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Welldone 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 Welldone will offset losses from the drop in Welldone's long position.| Fubon MSCI vs. YuantaP shares Taiwan Top | Fubon MSCI vs. Yuanta Daily Taiwan | Fubon MSCI vs. Cathay Taiwan 5G | Fubon MSCI vs. Yuanta Daily CSI |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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