Correlation Between Fubon Hang and Fubon FTSE
Can any of the company-specific risk be diversified away by investing in both Fubon Hang and Fubon FTSE 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 Hang and Fubon FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fubon Hang Seng and Fubon FTSE TWSE, you can compare the effects of market volatilities on Fubon Hang and Fubon FTSE 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 Hang with a short position of Fubon FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Hang and Fubon FTSE.
Diversification Opportunities for Fubon Hang and Fubon FTSE
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fubon and Fubon is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Hang Seng and Fubon FTSE TWSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon FTSE TWSE and Fubon Hang 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 Hang Seng are associated (or correlated) with Fubon FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon FTSE TWSE has no effect on the direction of Fubon Hang i.e., Fubon Hang and Fubon FTSE go up and down completely randomly.
Pair Corralation between Fubon Hang and Fubon FTSE
Assuming the 90 days trading horizon Fubon Hang Seng is expected to under-perform the Fubon FTSE. In addition to that, Fubon Hang is 1.25 times more volatile than Fubon FTSE TWSE. It trades about -0.03 of its total potential returns per unit of risk. Fubon FTSE TWSE is currently generating about 0.11 per unit of volatility. If you would invest 7,285 in Fubon FTSE TWSE on September 4, 2024 and sell it today you would earn a total of 3,830 from holding Fubon FTSE TWSE or generate 52.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon Hang Seng vs. Fubon FTSE TWSE
Performance |
| Timeline |
| Fubon Hang Seng |
| Fubon FTSE TWSE |
Fubon Hang and Fubon FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Hang and Fubon FTSE
The main advantage of trading using opposite Fubon Hang and Fubon FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Hang position performs unexpectedly, Fubon FTSE 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 FTSE will offset losses from the drop in Fubon FTSE's long position.| Fubon Hang vs. Cathay Taiwan 5G | Fubon Hang vs. Ruentex Development Co | Fubon Hang vs. Symtek Automation Asia | Fubon Hang vs. CTCI Corp |
| Fubon FTSE vs. Fubon Hang Seng | Fubon FTSE vs. Fubon SP Preferred | Fubon FTSE vs. Fubon NASDAQ 100 1X | Fubon FTSE vs. Fubon TWSE Corporate |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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