Correlation Between Fubon SSE180 and YuantaP Shares
Can any of the company-specific risk be diversified away by investing in both Fubon SSE180 and YuantaP Shares 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 SSE180 and YuantaP Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fubon SSE180 Leveraged and YuantaP shares MSCI Taiwan, you can compare the effects of market volatilities on Fubon SSE180 and YuantaP Shares 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 SSE180 with a short position of YuantaP Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon SSE180 and YuantaP Shares.
Diversification Opportunities for Fubon SSE180 and YuantaP Shares
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fubon and YuantaP is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Fubon SSE180 Leveraged and YuantaP shares MSCI Taiwan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YuantaP shares MSCI and Fubon SSE180 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 SSE180 Leveraged are associated (or correlated) with YuantaP Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YuantaP shares MSCI has no effect on the direction of Fubon SSE180 i.e., Fubon SSE180 and YuantaP Shares go up and down completely randomly.
Pair Corralation between Fubon SSE180 and YuantaP Shares
Assuming the 90 days trading horizon Fubon SSE180 Leveraged is expected to under-perform the YuantaP Shares. In addition to that, Fubon SSE180 is 1.9 times more volatile than YuantaP shares MSCI Taiwan. It trades about -0.13 of its total potential returns per unit of risk. YuantaP shares MSCI Taiwan is currently generating about -0.17 per unit of volatility. If you would invest 2,937 in YuantaP shares MSCI Taiwan on August 29, 2024 and sell it today you would lose (128.00) from holding YuantaP shares MSCI Taiwan or give up 4.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon SSE180 Leveraged vs. YuantaP shares MSCI Taiwan
Performance |
| Timeline |
| Fubon SSE180 Leveraged |
| YuantaP shares MSCI |
Fubon SSE180 and YuantaP Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon SSE180 and YuantaP Shares
The main advantage of trading using opposite Fubon SSE180 and YuantaP Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon SSE180 position performs unexpectedly, YuantaP Shares 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 YuantaP Shares will offset losses from the drop in YuantaP Shares' long position.| Fubon SSE180 vs. Fubon Hang Seng | Fubon SSE180 vs. Fubon SP Preferred | Fubon SSE180 vs. Fubon NASDAQ 100 1X | Fubon SSE180 vs. Fubon TWSE Corporate |
| YuantaP Shares vs. Yuanta Daily Taiwan | YuantaP Shares vs. Fubon SSE180 Leveraged | YuantaP Shares vs. Leatec Fine Ceramics | YuantaP Shares vs. Information Technology Total |
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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