Correlation Between Fubon MSCI and Yufo Electronics
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Yufo Electronics 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 Yufo Electronics 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 Yufo Electronics Co, you can compare the effects of market volatilities on Fubon MSCI and Yufo Electronics 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 Yufo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Yufo Electronics.
Diversification Opportunities for Fubon MSCI and Yufo Electronics
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and Yufo is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Yufo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yufo Electronics 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 Yufo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yufo Electronics has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Yufo Electronics go up and down completely randomly.
Pair Corralation between Fubon MSCI and Yufo Electronics
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 0.73 times more return on investment than Yufo Electronics. However, Fubon MSCI Taiwan is 1.38 times less risky than Yufo Electronics. It trades about 0.11 of its potential returns per unit of risk. Yufo Electronics Co is currently generating about 0.01 per unit of risk. If you would invest 9,635 in Fubon MSCI Taiwan on September 3, 2024 and sell it today you would earn a total of 4,130 from holding Fubon MSCI Taiwan or generate 42.86% 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. Yufo Electronics Co
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Yufo Electronics |
Fubon MSCI and Yufo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Yufo Electronics
The main advantage of trading using opposite Fubon MSCI and Yufo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Yufo Electronics 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 Yufo Electronics will offset losses from the drop in Yufo Electronics' 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 |
| Yufo Electronics vs. Simple Mart Retail | Yufo Electronics vs. APEX International Financial | Yufo Electronics vs. Central Reinsurance Corp | Yufo Electronics vs. Shiny Chemical Industrial |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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