Correlation Between Fubon MSCI and Galaxy Software
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Galaxy Software 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 Galaxy Software 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 Galaxy Software Services, you can compare the effects of market volatilities on Fubon MSCI and Galaxy Software 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 Galaxy Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Galaxy Software.
Diversification Opportunities for Fubon MSCI and Galaxy Software
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fubon and Galaxy is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Galaxy Software Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galaxy Software Services 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 Galaxy Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galaxy Software Services has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Galaxy Software go up and down completely randomly.
Pair Corralation between Fubon MSCI and Galaxy Software
Assuming the 90 days trading horizon Fubon MSCI is expected to generate 18.08 times less return on investment than Galaxy Software. But when comparing it to its historical volatility, Fubon MSCI Taiwan is 36.87 times less risky than Galaxy Software. It trades about 0.09 of its potential returns per unit of risk. Galaxy Software Services is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,048 in Galaxy Software Services on August 30, 2024 and sell it today you would earn a total of 6,902 from holding Galaxy Software Services or generate 136.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. Galaxy Software Services
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Galaxy Software Services |
Fubon MSCI and Galaxy Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Galaxy Software
The main advantage of trading using opposite Fubon MSCI and Galaxy Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Galaxy Software 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 Galaxy Software will offset losses from the drop in Galaxy Software'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 |
| Galaxy Software vs. YuantaP shares Taiwan Electronics | Galaxy Software vs. YuantaP shares Taiwan Top | Galaxy Software vs. YuantaP shares Taiwan Mid Cap | Galaxy Software vs. Fubon MSCI Taiwan |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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