Correlation Between Fubon MSCI and MPI
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and MPI 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 MPI 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 MPI Corporation, you can compare the effects of market volatilities on Fubon MSCI and MPI 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 MPI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and MPI.
Diversification Opportunities for Fubon MSCI and MPI
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fubon and MPI is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and MPI Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPI Corporation 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 MPI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPI Corporation has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and MPI go up and down completely randomly.
Pair Corralation between Fubon MSCI and MPI
Assuming the 90 days trading horizon Fubon MSCI is expected to generate 3.76 times less return on investment than MPI. But when comparing it to its historical volatility, Fubon MSCI Taiwan is 2.59 times less risky than MPI. It trades about 0.1 of its potential returns per unit of risk. MPI Corporation is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 11,234 in MPI Corporation on September 4, 2024 and sell it today you would earn a total of 66,566 from holding MPI Corporation or generate 592.54% 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. MPI Corp.
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| MPI Corporation |
Fubon MSCI and MPI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and MPI
The main advantage of trading using opposite Fubon MSCI and MPI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, MPI 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 MPI will offset losses from the drop in MPI'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 |
| MPI vs. Novatek Microelectronics Corp | MPI vs. King Yuan Electronics | MPI vs. Wafer Works | MPI vs. Chipbond 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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