Correlation Between Fuh Hwa and Capital BofA
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By analyzing existing cross correlation between Fuh Hwa Emerging and Capital BofA Merrill, you can compare the effects of market volatilities on Fuh Hwa and Capital BofA 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 Capital BofA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuh Hwa and Capital BofA.
Diversification Opportunities for Fuh Hwa and Capital BofA
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fuh and Capital is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Fuh Hwa Emerging and Capital BofA Merrill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital BofA Merrill 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 Emerging are associated (or correlated) with Capital BofA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital BofA Merrill has no effect on the direction of Fuh Hwa i.e., Fuh Hwa and Capital BofA go up and down completely randomly.
Pair Corralation between Fuh Hwa and Capital BofA
Assuming the 90 days trading horizon Fuh Hwa is expected to generate 1.54 times less return on investment than Capital BofA. But when comparing it to its historical volatility, Fuh Hwa Emerging is 1.28 times less risky than Capital BofA. It trades about 0.34 of its potential returns per unit of risk. Capital BofA Merrill is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 3,808 in Capital BofA Merrill on September 5, 2024 and sell it today you would earn a total of 214.00 from holding Capital BofA Merrill or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuh Hwa Emerging vs. Capital BofA Merrill
Performance |
| Timeline |
| Fuh Hwa Emerging |
| Capital BofA Merrill |
Fuh Hwa and Capital BofA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuh Hwa and Capital BofA
The main advantage of trading using opposite Fuh Hwa and Capital BofA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuh Hwa position performs unexpectedly, Capital BofA 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 Capital BofA will offset losses from the drop in Capital BofA's long position.| Fuh Hwa vs. Ruentex Development Co | Fuh Hwa vs. Symtek Automation Asia | Fuh Hwa vs. CTCI Corp | Fuh Hwa vs. Information Technology Total |
| Capital BofA vs. Ruentex Development Co | Capital BofA vs. Symtek Automation Asia | Capital BofA vs. CTCI Corp | Capital BofA vs. Information Technology Total |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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