Correlation Between Fubon MSCI and I Jang
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and I Jang 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 I Jang 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 I Jang Industrial, you can compare the effects of market volatilities on Fubon MSCI and I Jang 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 I Jang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and I Jang.
Diversification Opportunities for Fubon MSCI and I Jang
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fubon and 8342 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and I Jang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Jang Industrial 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 I Jang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Jang Industrial has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and I Jang go up and down completely randomly.
Pair Corralation between Fubon MSCI and I Jang
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to under-perform the I Jang. In addition to that, Fubon MSCI is 1.4 times more volatile than I Jang Industrial. It trades about -0.03 of its total potential returns per unit of risk. I Jang Industrial is currently generating about 0.01 per unit of volatility. If you would invest 8,860 in I Jang Industrial on November 30, 2024 and sell it today you would earn a total of 20.00 from holding I Jang Industrial or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon MSCI Taiwan vs. I Jang Industrial
Performance |
| Timeline |
| Fubon MSCI Taiwan |
| I Jang Industrial |
Fubon MSCI and I Jang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon MSCI and I Jang
The main advantage of trading using opposite Fubon MSCI and I Jang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, I Jang 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 I Jang will offset losses from the drop in I Jang'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 |
| I Jang vs. Mercuries Life Insurance | I Jang vs. Yuanta Financial Holdings | I Jang vs. Fubon Financial Holding | I Jang vs. Easywell Biomedicals |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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