Correlation Between Fuh Hwa and Yuanta Global
Can any of the company-specific risk be diversified away by investing in both Fuh Hwa and Yuanta Global 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 Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fuh Hwa Emerging and Yuanta Global NexGen, you can compare the effects of market volatilities on Fuh Hwa and Yuanta Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuh Hwa and Yuanta Global.
Diversification Opportunities for Fuh Hwa and Yuanta Global
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fuh and Yuanta is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Fuh Hwa Emerging and Yuanta Global NexGen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Global NexGen 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Global NexGen has no effect on the direction of Fuh Hwa i.e., Fuh Hwa and Yuanta Global go up and down completely randomly.
Pair Corralation between Fuh Hwa and Yuanta Global
Assuming the 90 days trading horizon Fuh Hwa Emerging is expected to generate 0.28 times more return on investment than Yuanta Global. However, Fuh Hwa Emerging is 3.58 times less risky than Yuanta Global. It trades about 0.05 of its potential returns per unit of risk. Yuanta Global NexGen is currently generating about 0.0 per unit of risk. If you would invest 1,615 in Fuh Hwa Emerging on September 3, 2024 and sell it today you would earn a total of 60.00 from holding Fuh Hwa Emerging or generate 3.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuh Hwa Emerging vs. Yuanta Global NexGen
Performance |
| Timeline |
| Fuh Hwa Emerging |
| Yuanta Global NexGen |
Fuh Hwa and Yuanta Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuh Hwa and Yuanta Global
The main advantage of trading using opposite Fuh Hwa and Yuanta Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuh Hwa position performs unexpectedly, Yuanta Global 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 Global will offset losses from the drop in Yuanta Global's long position.| Fuh Hwa vs. Cathay Taiwan 5G | Fuh Hwa vs. Ruentex Development Co | Fuh Hwa vs. Symtek Automation Asia | Fuh Hwa vs. CTCI Corp |
| Yuanta Global vs. Cathay Taiwan 5G | Yuanta Global vs. Ruentex Development Co | Yuanta Global vs. Symtek Automation Asia | Yuanta Global vs. CTCI Corp |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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