Correlation Between Yuanta Daily and Fubon SP
Can any of the company-specific risk be diversified away by investing in both Yuanta Daily and Fubon SP 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 SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuanta Daily SP and Fubon SP Preferred, you can compare the effects of market volatilities on Yuanta Daily and Fubon SP 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 SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Daily and Fubon SP.
Diversification Opportunities for Yuanta Daily and Fubon SP
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yuanta and Fubon is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Daily SP and Fubon SP Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon SP Preferred 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 SP are associated (or correlated) with Fubon SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon SP Preferred has no effect on the direction of Yuanta Daily i.e., Yuanta Daily and Fubon SP go up and down completely randomly.
Pair Corralation between Yuanta Daily and Fubon SP
Assuming the 90 days trading horizon Yuanta Daily SP is expected to under-perform the Fubon SP. In addition to that, Yuanta Daily is 1.76 times more volatile than Fubon SP Preferred. It trades about -0.09 of its total potential returns per unit of risk. Fubon SP Preferred is currently generating about 0.06 per unit of volatility. If you would invest 1,480 in Fubon SP Preferred on August 28, 2024 and sell it today you would earn a total of 156.00 from holding Fubon SP Preferred or generate 10.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
Yuanta Daily SP vs. Fubon SP Preferred
Performance |
| Timeline |
| Yuanta Daily SP |
| Fubon SP Preferred |
Yuanta Daily and Fubon SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuanta Daily and Fubon SP
The main advantage of trading using opposite Yuanta Daily and Fubon SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Daily position performs unexpectedly, Fubon SP 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 SP will offset losses from the drop in Fubon SP's long position.| Yuanta Daily vs. Yuanta Securities Investment | Yuanta Daily vs. Yuanta SP GSCI | Yuanta Daily vs. Yuanta Global NexGen | Yuanta Daily vs. Yuanta 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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