Correlation Between Yuanta Daily and Fubon NASDAQ
Can any of the company-specific risk be diversified away by investing in both Yuanta Daily and Fubon NASDAQ 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 Yuanta Daily and Fubon NASDAQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuanta Daily Taiwan and Fubon NASDAQ 100 1X, you can compare the effects of market volatilities on Yuanta Daily and Fubon NASDAQ 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 Yuanta Daily with a short position of Fubon NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Daily and Fubon NASDAQ.
Diversification Opportunities for Yuanta Daily and Fubon NASDAQ
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yuanta and Fubon is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Daily Taiwan and Fubon NASDAQ 100 1X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon NASDAQ 100 and Yuanta Daily 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 Yuanta Daily Taiwan are associated (or correlated) with Fubon NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon NASDAQ 100 has no effect on the direction of Yuanta Daily i.e., Yuanta Daily and Fubon NASDAQ go up and down completely randomly.
Pair Corralation between Yuanta Daily and Fubon NASDAQ
Assuming the 90 days trading horizon Yuanta Daily Taiwan is expected to generate 1.26 times more return on investment than Fubon NASDAQ. However, Yuanta Daily is 1.26 times more volatile than Fubon NASDAQ 100 1X. It trades about -0.03 of its potential returns per unit of risk. Fubon NASDAQ 100 1X is currently generating about -0.07 per unit of risk. If you would invest 365.00 in Yuanta Daily Taiwan on August 31, 2024 and sell it today you would lose (27.00) from holding Yuanta Daily Taiwan or give up 7.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuanta Daily Taiwan vs. Fubon NASDAQ 100 1X
Performance |
| Timeline |
| Yuanta Daily Taiwan |
| Fubon NASDAQ 100 |
Yuanta Daily and Fubon NASDAQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuanta Daily and Fubon NASDAQ
The main advantage of trading using opposite Yuanta Daily and Fubon NASDAQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Daily position performs unexpectedly, Fubon NASDAQ 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 Fubon NASDAQ will offset losses from the drop in Fubon NASDAQ's long position.| Yuanta Daily vs. Cathay Taiwan 5G | Yuanta Daily vs. Yuanta Daily CSI | Yuanta Daily vs. Fubon FTSE Vietnam | Yuanta Daily vs. Fuh Hwa Emerging |
| Fubon NASDAQ vs. Yuanta Daily Taiwan | Fubon NASDAQ vs. Cathay Taiwan 5G | Fubon NASDAQ vs. Yuanta Daily CSI | Fubon NASDAQ vs. Fubon FTSE Vietnam |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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