Correlation Between Fubon SSE180 and Yuanta Daily
Can any of the company-specific risk be diversified away by investing in both Fubon SSE180 and Yuanta Daily 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 Yuanta Daily 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 Yuanta Daily Taiwan, you can compare the effects of market volatilities on Fubon SSE180 and Yuanta Daily 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 Yuanta Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon SSE180 and Yuanta Daily.
Diversification Opportunities for Fubon SSE180 and Yuanta Daily
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fubon and Yuanta is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Fubon SSE180 Leveraged and Yuanta Daily Taiwan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Daily Taiwan 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 Yuanta Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Daily Taiwan has no effect on the direction of Fubon SSE180 i.e., Fubon SSE180 and Yuanta Daily go up and down completely randomly.
Pair Corralation between Fubon SSE180 and Yuanta Daily
Assuming the 90 days trading horizon Fubon SSE180 is expected to generate 7.38 times less return on investment than Yuanta Daily. In addition to that, Fubon SSE180 is 1.07 times more volatile than Yuanta Daily Taiwan. It trades about 0.01 of its total potential returns per unit of risk. Yuanta Daily Taiwan is currently generating about 0.09 per unit of volatility. If you would invest 9,765 in Yuanta Daily Taiwan on September 3, 2024 and sell it today you would earn a total of 12,960 from holding Yuanta Daily Taiwan or generate 132.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon SSE180 Leveraged vs. Yuanta Daily Taiwan
Performance |
| Timeline |
| Fubon SSE180 Leveraged |
| Yuanta Daily Taiwan |
Fubon SSE180 and Yuanta Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon SSE180 and Yuanta Daily
The main advantage of trading using opposite Fubon SSE180 and Yuanta Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon SSE180 position performs unexpectedly, Yuanta Daily 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 Yuanta Daily will offset losses from the drop in Yuanta Daily's long position.| Fubon SSE180 vs. Cathay Taiwan 5G | Fubon SSE180 vs. Ruentex Development Co | Fubon SSE180 vs. Symtek Automation Asia | Fubon SSE180 vs. CTCI Corp |
| Yuanta Daily vs. Yuanta Daily SP | Yuanta Daily vs. Yuanta Securities Investment | Yuanta Daily vs. Yuanta SP GSCI | Yuanta Daily vs. Yuanta Global NexGen |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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