Correlation Between Fubon MSCI and Wafer Works
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Wafer Works 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 Wafer Works 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 Wafer Works, you can compare the effects of market volatilities on Fubon MSCI and Wafer Works 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 Wafer Works. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Wafer Works.
Diversification Opportunities for Fubon MSCI and Wafer Works
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and Wafer is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Wafer Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wafer Works 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 Wafer Works. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wafer Works has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Wafer Works go up and down completely randomly.
Pair Corralation between Fubon MSCI and Wafer Works
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 0.57 times more return on investment than Wafer Works. However, Fubon MSCI Taiwan is 1.75 times less risky than Wafer Works. It trades about 0.1 of its potential returns per unit of risk. Wafer Works is currently generating about -0.34 per unit of risk. If you would invest 14,500 in Fubon MSCI Taiwan on October 25, 2024 and sell it today you would earn a total of 390.00 from holding Fubon MSCI Taiwan or generate 2.69% 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. Wafer Works
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Wafer Works |
Fubon MSCI and Wafer Works Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Wafer Works
The main advantage of trading using opposite Fubon MSCI and Wafer Works positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Wafer Works 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 Wafer Works will offset losses from the drop in Wafer Works' 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 |
| Wafer Works vs. Sino American Silicon Products | Wafer Works vs. GlobalWafers Co | Wafer Works vs. Motech Industries Co | Wafer Works vs. Formosa Sumco Technology |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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