Correlation Between Fubon MSCI and CHO Pharma
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and CHO Pharma 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 CHO Pharma 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 CHO Pharma, you can compare the effects of market volatilities on Fubon MSCI and CHO Pharma 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 CHO Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and CHO Pharma.
Diversification Opportunities for Fubon MSCI and CHO Pharma
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fubon and CHO is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and CHO Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHO Pharma 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 CHO Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHO Pharma has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and CHO Pharma go up and down completely randomly.
Pair Corralation between Fubon MSCI and CHO Pharma
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 0.41 times more return on investment than CHO Pharma. However, Fubon MSCI Taiwan is 2.43 times less risky than CHO Pharma. It trades about -0.03 of its potential returns per unit of risk. CHO Pharma is currently generating about -0.01 per unit of risk. If you would invest 14,300 in Fubon MSCI Taiwan on September 13, 2024 and sell it today you would lose (125.00) from holding Fubon MSCI Taiwan or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. CHO Pharma
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| CHO Pharma |
Fubon MSCI and CHO Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and CHO Pharma
The main advantage of trading using opposite Fubon MSCI and CHO Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, CHO Pharma 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 CHO Pharma will offset losses from the drop in CHO Pharma'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 |
| CHO Pharma vs. Cheng Mei Materials | CHO Pharma vs. Shanghai Commercial Savings | CHO Pharma vs. Advanced Echem Materials | CHO Pharma vs. Baotek Industrial Materials |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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