Correlation Between Fubon MSCI and TMP Steel
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and TMP Steel 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 TMP Steel 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 TMP Steel, you can compare the effects of market volatilities on Fubon MSCI and TMP Steel 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 TMP Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and TMP Steel.
Diversification Opportunities for Fubon MSCI and TMP Steel
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fubon and TMP is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and TMP Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMP Steel 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 TMP Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMP Steel has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and TMP Steel go up and down completely randomly.
Pair Corralation between Fubon MSCI and TMP Steel
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 0.96 times more return on investment than TMP Steel. However, Fubon MSCI Taiwan is 1.04 times less risky than TMP Steel. It trades about 0.08 of its potential returns per unit of risk. TMP Steel is currently generating about -0.03 per unit of risk. If you would invest 11,100 in Fubon MSCI Taiwan on September 1, 2024 and sell it today you would earn a total of 2,665 from holding Fubon MSCI Taiwan or generate 24.01% 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. TMP Steel
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| TMP Steel |
Fubon MSCI and TMP Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and TMP Steel
The main advantage of trading using opposite Fubon MSCI and TMP Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, TMP Steel 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 TMP Steel will offset losses from the drop in TMP Steel's long position.| Fubon MSCI vs. Yuanta Daily Taiwan | Fubon MSCI vs. Yuanta Daily CSI | Fubon MSCI vs. Fubon FTSE Vietnam | Fubon MSCI vs. Fuh Hwa Emerging |
| TMP Steel vs. Sunspring Metal Corp | TMP Steel vs. Microelectronics Technology | TMP Steel vs. Sun Max Tech | TMP Steel vs. United Radiant 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |