Correlation Between Fuh Hwa and Yuanta Daily
Can any of the company-specific risk be diversified away by investing in both Fuh Hwa 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 Fuh Hwa and Yuanta Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fuh Hwa Daily and Yuanta Daily Taiwan, you can compare the effects of market volatilities on Fuh Hwa 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 Fuh Hwa with a short position of Yuanta Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuh Hwa and Yuanta Daily.
Diversification Opportunities for Fuh Hwa and Yuanta Daily
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fuh and Yuanta is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fuh Hwa Daily 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 Fuh Hwa 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 Fuh Hwa Daily 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 Fuh Hwa i.e., Fuh Hwa and Yuanta Daily go up and down completely randomly.
Pair Corralation between Fuh Hwa and Yuanta Daily
Assuming the 90 days trading horizon Fuh Hwa Daily is expected to generate 1.28 times more return on investment than Yuanta Daily. However, Fuh Hwa is 1.28 times more volatile than Yuanta Daily Taiwan. It trades about 0.0 of its potential returns per unit of risk. Yuanta Daily Taiwan is currently generating about -0.09 per unit of risk. If you would invest 790.00 in Fuh Hwa Daily on August 31, 2024 and sell it today you would lose (16.00) from holding Fuh Hwa Daily or give up 2.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.78% |
| Values | Daily Returns |
Fuh Hwa Daily vs. Yuanta Daily Taiwan
Performance |
| Timeline |
| Fuh Hwa Daily |
| Yuanta Daily Taiwan |
Fuh Hwa and Yuanta Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuh Hwa and Yuanta Daily
The main advantage of trading using opposite Fuh Hwa and Yuanta Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuh Hwa 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.| Fuh Hwa vs. Yuanta Daily Taiwan | Fuh Hwa vs. Cathay Taiwan 5G | Fuh Hwa vs. Yuanta Daily CSI | Fuh Hwa vs. Fubon FTSE Vietnam |
| Yuanta Daily vs. Cathay Taiwan 5G | Yuanta Daily vs. Yuanta Daily CSI | Yuanta Daily vs. Fubon FTSE Vietnam | Yuanta Daily vs. Fuh Hwa Emerging |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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