Correlation Between Fuh Hwa and Fubon 1
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By analyzing existing cross correlation between Fuh Hwa FTSE and Fubon 1 3 Years, you can compare the effects of market volatilities on Fuh Hwa and Fubon 1 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 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuh Hwa and Fubon 1.
Diversification Opportunities for Fuh Hwa and Fubon 1
Pay attention - limited upside
The 3 months correlation between Fuh and Fubon is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Fuh Hwa FTSE and Fubon 1 3 Years in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon 1 3 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 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon 1 3 has no effect on the direction of Fuh Hwa i.e., Fuh Hwa and Fubon 1 go up and down completely randomly.
Pair Corralation between Fuh Hwa and Fubon 1
Assuming the 90 days trading horizon Fuh Hwa FTSE is expected to generate 3.38 times more return on investment than Fubon 1. However, Fuh Hwa is 3.38 times more volatile than Fubon 1 3 Years. It trades about 0.06 of its potential returns per unit of risk. Fubon 1 3 Years is currently generating about 0.1 per unit of risk. If you would invest 5,289 in Fuh Hwa FTSE on September 2, 2024 and sell it today you would earn a total of 1,461 from holding Fuh Hwa FTSE or generate 27.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Fuh Hwa FTSE vs. Fubon 1 3 Years
Performance |
| Timeline |
| Fuh Hwa FTSE |
| Fubon 1 3 |
Fuh Hwa and Fubon 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuh Hwa and Fubon 1
The main advantage of trading using opposite Fuh Hwa and Fubon 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuh Hwa position performs unexpectedly, Fubon 1 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 1 will offset losses from the drop in Fubon 1's long position.The idea behind Fuh Hwa FTSE and Fubon 1 3 Years 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.| Fubon 1 vs. Fubon Hang Seng | Fubon 1 vs. Fubon SP Preferred | Fubon 1 vs. Fubon NASDAQ 100 1X | Fubon 1 vs. Fubon TWSE Corporate |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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