Correlation Between Fubon MSCI and Info Tek
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Info Tek 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 Info Tek 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 Info Tek, you can compare the effects of market volatilities on Fubon MSCI and Info Tek 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 Info Tek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Info Tek.
Diversification Opportunities for Fubon MSCI and Info Tek
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fubon and Info is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Info Tek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Info Tek 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 Info Tek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Info Tek has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Info Tek go up and down completely randomly.
Pair Corralation between Fubon MSCI and Info Tek
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to under-perform the Info Tek. But the etf apears to be less risky and, when comparing its historical volatility, Fubon MSCI Taiwan is 1.46 times less risky than Info Tek. The etf trades about -0.02 of its potential returns per unit of risk. The Info Tek is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,875 in Info Tek on September 4, 2024 and sell it today you would earn a total of 105.00 from holding Info Tek or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. Info Tek
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| Info Tek |
Fubon MSCI and Info Tek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and Info Tek
The main advantage of trading using opposite Fubon MSCI and Info Tek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Info Tek 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 Info Tek will offset losses from the drop in Info Tek's long position.| Fubon MSCI vs. Cathay Taiwan 5G | Fubon MSCI vs. Ruentex Development Co | Fubon MSCI vs. Symtek Automation Asia | Fubon MSCI vs. CTCI Corp |
| Info Tek vs. Hon Hai Precision | Info Tek vs. Delta Electronics | Info Tek vs. LARGAN Precision Co | Info Tek vs. AU Optronics |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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