Correlation Between Fuh Hwa and Cathay Taiwan
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By analyzing existing cross correlation between Fuh Hwa 20 and Cathay Taiwan 5G, you can compare the effects of market volatilities on Fuh Hwa and Cathay Taiwan 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 Cathay Taiwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuh Hwa and Cathay Taiwan.
Diversification Opportunities for Fuh Hwa and Cathay Taiwan
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fuh and Cathay is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Fuh Hwa 20 and Cathay Taiwan 5G in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Taiwan 5G 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 20 are associated (or correlated) with Cathay Taiwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Taiwan 5G has no effect on the direction of Fuh Hwa i.e., Fuh Hwa and Cathay Taiwan go up and down completely randomly.
Pair Corralation between Fuh Hwa and Cathay Taiwan
Assuming the 90 days trading horizon Fuh Hwa 20 is expected to generate 0.55 times more return on investment than Cathay Taiwan. However, Fuh Hwa 20 is 1.8 times less risky than Cathay Taiwan. It trades about 0.13 of its potential returns per unit of risk. Cathay Taiwan 5G is currently generating about -0.09 per unit of risk. If you would invest 5,280 in Fuh Hwa 20 on September 12, 2024 and sell it today you would earn a total of 95.00 from holding Fuh Hwa 20 or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuh Hwa 20 vs. Cathay Taiwan 5G
Performance |
| Timeline |
| Fuh Hwa 20 |
| Cathay Taiwan 5G |
Fuh Hwa and Cathay Taiwan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuh Hwa and Cathay Taiwan
The main advantage of trading using opposite Fuh Hwa and Cathay Taiwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuh Hwa position performs unexpectedly, Cathay Taiwan 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 Cathay Taiwan will offset losses from the drop in Cathay Taiwan's long position.| Fuh Hwa vs. YuantaP shares Taiwan Top | Fuh Hwa vs. Yuanta Daily Taiwan | Fuh Hwa vs. Cathay Taiwan 5G | Fuh Hwa vs. Yuanta Daily CSI |
| Cathay Taiwan vs. YuantaP shares Taiwan Top | Cathay Taiwan vs. Yuanta Daily Taiwan | Cathay Taiwan vs. Yuanta Daily CSI | Cathay Taiwan vs. Cathay Sustainability High |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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