Correlation Between Fuh Hwa and Fubon SSE180
Can any of the company-specific risk be diversified away by investing in both Fuh Hwa and Fubon SSE180 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 Fubon SSE180 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fuh Hwa FTSE and Fubon SSE180 Exchange, you can compare the effects of market volatilities on Fuh Hwa and Fubon SSE180 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 Fubon SSE180. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuh Hwa and Fubon SSE180.
Diversification Opportunities for Fuh Hwa and Fubon SSE180
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fuh and Fubon is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fuh Hwa FTSE and Fubon SSE180 Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon SSE180 Exchange 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 FTSE are associated (or correlated) with Fubon SSE180. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon SSE180 Exchange has no effect on the direction of Fuh Hwa i.e., Fuh Hwa and Fubon SSE180 go up and down completely randomly.
Pair Corralation between Fuh Hwa and Fubon SSE180
Assuming the 90 days trading horizon Fuh Hwa FTSE is expected to generate 0.92 times more return on investment than Fubon SSE180. However, Fuh Hwa FTSE is 1.09 times less risky than Fubon SSE180. It trades about 0.01 of its potential returns per unit of risk. Fubon SSE180 Exchange is currently generating about 0.01 per unit of risk. If you would invest 960.00 in Fuh Hwa FTSE on August 31, 2024 and sell it today you would earn a total of 25.00 from holding Fuh Hwa FTSE or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuh Hwa FTSE vs. Fubon SSE180 Exchange
Performance |
| Timeline |
| Fuh Hwa FTSE |
| Fubon SSE180 Exchange |
Fuh Hwa and Fubon SSE180 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuh Hwa and Fubon SSE180
The main advantage of trading using opposite Fuh Hwa and Fubon SSE180 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuh Hwa position performs unexpectedly, Fubon SSE180 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 SSE180 will offset losses from the drop in Fubon SSE180's long position.| Fuh Hwa vs. Yuanta Daily Taiwan | Fuh Hwa vs. Cathay Taiwan 5G | Fuh Hwa vs. Yuanta Daily CSI | Fuh Hwa vs. Fubon FTSE Vietnam |
| Fubon SSE180 vs. Yuanta Daily Taiwan | Fubon SSE180 vs. Cathay Taiwan 5G | Fubon SSE180 vs. Yuanta Daily CSI | Fubon SSE180 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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