Correlation Between Fubon FTSE and Cathay Bloomberg
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By analyzing existing cross correlation between Fubon FTSE TWSE and Cathay Bloomberg Barclays, you can compare the effects of market volatilities on Fubon FTSE and Cathay Bloomberg 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 FTSE with a short position of Cathay Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon FTSE and Cathay Bloomberg.
Diversification Opportunities for Fubon FTSE and Cathay Bloomberg
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fubon and Cathay is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fubon FTSE TWSE and Cathay Bloomberg Barclays in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Bloomberg Barclays and Fubon FTSE 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 FTSE TWSE are associated (or correlated) with Cathay Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Bloomberg Barclays has no effect on the direction of Fubon FTSE i.e., Fubon FTSE and Cathay Bloomberg go up and down completely randomly.
Pair Corralation between Fubon FTSE and Cathay Bloomberg
Assuming the 90 days trading horizon Fubon FTSE TWSE is expected to generate 2.28 times more return on investment than Cathay Bloomberg. However, Fubon FTSE is 2.28 times more volatile than Cathay Bloomberg Barclays. It trades about 0.11 of its potential returns per unit of risk. Cathay Bloomberg Barclays is currently generating about 0.02 per unit of risk. If you would invest 7,420 in Fubon FTSE TWSE on September 2, 2024 and sell it today you would earn a total of 3,405 from holding Fubon FTSE TWSE or generate 45.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon FTSE TWSE vs. Cathay Bloomberg Barclays
Performance |
| Timeline |
| Fubon FTSE TWSE |
| Cathay Bloomberg Barclays |
Fubon FTSE and Cathay Bloomberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon FTSE and Cathay Bloomberg
The main advantage of trading using opposite Fubon FTSE and Cathay Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon FTSE position performs unexpectedly, Cathay Bloomberg 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 Cathay Bloomberg will offset losses from the drop in Cathay Bloomberg's long position.The idea behind Fubon FTSE TWSE and Cathay Bloomberg Barclays pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cathay Bloomberg vs. Yuanta Daily CSI | Cathay Bloomberg vs. Fubon FTSE Vietnam | Cathay Bloomberg vs. Paradigm SP GSCI |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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