Correlation Between Fubon 1 and YuantaP Shares
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By analyzing existing cross correlation between Fubon 1 3 Years and YuantaP shares Taiwan Dividend, you can compare the effects of market volatilities on Fubon 1 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 1 with a short position of YuantaP Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon 1 and YuantaP Shares.
Diversification Opportunities for Fubon 1 and YuantaP Shares
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and YuantaP is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Fubon 1 3 Years and YuantaP shares Taiwan Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YuantaP shares Taiwan and Fubon 1 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 1 3 Years 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 Taiwan has no effect on the direction of Fubon 1 i.e., Fubon 1 and YuantaP Shares go up and down completely randomly.
Pair Corralation between Fubon 1 and YuantaP Shares
Assuming the 90 days trading horizon Fubon 1 is expected to generate 4.05 times less return on investment than YuantaP Shares. But when comparing it to its historical volatility, Fubon 1 3 Years is 3.8 times less risky than YuantaP Shares. It trades about 0.1 of its potential returns per unit of risk. YuantaP shares Taiwan Dividend is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,452 in YuantaP shares Taiwan Dividend on August 29, 2024 and sell it today you would earn a total of 1,279 from holding YuantaP shares Taiwan Dividend or generate 52.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Fubon 1 3 Years vs. YuantaP shares Taiwan Dividend
Performance |
| Timeline |
| Fubon 1 3 |
| YuantaP shares Taiwan |
Fubon 1 and YuantaP Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon 1 and YuantaP Shares
The main advantage of trading using opposite Fubon 1 and YuantaP Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon 1 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.The idea behind Fubon 1 3 Years and YuantaP shares Taiwan Dividend pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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