Correlation Between Fuh Hwa and Yuanta 10
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By analyzing existing cross correlation between Fuh Hwa Emerging and Yuanta 10 Investment, you can compare the effects of market volatilities on Fuh Hwa and Yuanta 10 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 10. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuh Hwa and Yuanta 10.
Diversification Opportunities for Fuh Hwa and Yuanta 10
Very poor diversification
The 3 months correlation between Fuh and Yuanta is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fuh Hwa Emerging and Yuanta 10 Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta 10 Investment 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 Yuanta 10. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta 10 Investment has no effect on the direction of Fuh Hwa i.e., Fuh Hwa and Yuanta 10 go up and down completely randomly.
Pair Corralation between Fuh Hwa and Yuanta 10
Assuming the 90 days trading horizon Fuh Hwa is expected to generate 2.47 times less return on investment than Yuanta 10. But when comparing it to its historical volatility, Fuh Hwa Emerging is 1.27 times less risky than Yuanta 10. It trades about 0.02 of its potential returns per unit of risk. Yuanta 10 Investment is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,904 in Yuanta 10 Investment on August 31, 2024 and sell it today you would earn a total of 367.00 from holding Yuanta 10 Investment or generate 12.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuh Hwa Emerging vs. Yuanta 10 Investment
Performance |
| Timeline |
| Fuh Hwa Emerging |
| Yuanta 10 Investment |
Fuh Hwa and Yuanta 10 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuh Hwa and Yuanta 10
The main advantage of trading using opposite Fuh Hwa and Yuanta 10 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuh Hwa position performs unexpectedly, Yuanta 10 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 10 will offset losses from the drop in Yuanta 10's long position.The idea behind Fuh Hwa Emerging and Yuanta 10 Investment 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.| Yuanta 10 vs. Yuanta Daily Taiwan | Yuanta 10 vs. Cathay Taiwan 5G | Yuanta 10 vs. Yuanta Daily CSI | Yuanta 10 vs. Fubon FTSE Vietnam |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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