Correlation Between Fubon MSCI and San Neng
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and San Neng 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 San Neng 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 San Neng Group, you can compare the effects of market volatilities on Fubon MSCI and San Neng 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 San Neng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and San Neng.
Diversification Opportunities for Fubon MSCI and San Neng
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and San is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and San Neng Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Neng Group 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 San Neng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Neng Group has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and San Neng go up and down completely randomly.
Pair Corralation between Fubon MSCI and San Neng
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to under-perform the San Neng. In addition to that, Fubon MSCI is 2.29 times more volatile than San Neng Group. It trades about -0.07 of its total potential returns per unit of risk. San Neng Group is currently generating about -0.13 per unit of volatility. If you would invest 4,265 in San Neng Group on August 26, 2024 and sell it today you would lose (65.00) from holding San Neng Group or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. San Neng Group
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| San Neng Group |
Fubon MSCI and San Neng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and San Neng
The main advantage of trading using opposite Fubon MSCI and San Neng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, San Neng 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 San Neng will offset losses from the drop in San Neng's 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 |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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