Correlation Between Fubon MSCI and Dawushan Farm
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Dawushan Farm 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 Dawushan Farm 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 Dawushan Farm Tech, you can compare the effects of market volatilities on Fubon MSCI and Dawushan Farm 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 Dawushan Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Dawushan Farm.
Diversification Opportunities for Fubon MSCI and Dawushan Farm
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fubon and Dawushan is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Dawushan Farm Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dawushan Farm Tech 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 Dawushan Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dawushan Farm Tech has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Dawushan Farm go up and down completely randomly.
Pair Corralation between Fubon MSCI and Dawushan Farm
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to under-perform the Dawushan Farm. But the etf apears to be less risky and, when comparing its historical volatility, Fubon MSCI Taiwan is 2.03 times less risky than Dawushan Farm. The etf trades about -0.09 of its potential returns per unit of risk. The Dawushan Farm Tech is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,650 in Dawushan Farm Tech on August 30, 2024 and sell it today you would earn a total of 140.00 from holding Dawushan Farm Tech or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. Dawushan Farm Tech
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Dawushan Farm Tech |
Fubon MSCI and Dawushan Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Dawushan Farm
The main advantage of trading using opposite Fubon MSCI and Dawushan Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Dawushan Farm 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 Dawushan Farm will offset losses from the drop in Dawushan Farm's long position.| Fubon MSCI vs. Symtek Automation Asia | Fubon MSCI vs. CTCI Corp | Fubon MSCI vs. Information Technology Total | Fubon MSCI vs. Kinko Optical Co |
| Dawushan Farm vs. Taiwan Chinsan Electronic | Dawushan Farm vs. Shan Loong Transportation Co | Dawushan Farm vs. Bright Led Electronics | Dawushan Farm vs. Voltronic Power 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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