Correlation Between Fubon FTSE and Yuanta Daily
Can any of the company-specific risk be diversified away by investing in both Fubon FTSE and Yuanta Daily 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 Fubon FTSE and Yuanta Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fubon FTSE Vietnam and Yuanta Daily Taiwan, you can compare the effects of market volatilities on Fubon FTSE and Yuanta Daily 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 Fubon FTSE with a short position of Yuanta Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon FTSE and Yuanta Daily.
Diversification Opportunities for Fubon FTSE and Yuanta Daily
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and Yuanta is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Fubon FTSE Vietnam and Yuanta Daily Taiwan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Daily Taiwan and Fubon FTSE 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 Fubon FTSE Vietnam are associated (or correlated) with Yuanta Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Daily Taiwan has no effect on the direction of Fubon FTSE i.e., Fubon FTSE and Yuanta Daily go up and down completely randomly.
Pair Corralation between Fubon FTSE and Yuanta Daily
Assuming the 90 days trading horizon Fubon FTSE is expected to generate 82.14 times less return on investment than Yuanta Daily. But when comparing it to its historical volatility, Fubon FTSE Vietnam is 2.23 times less risky than Yuanta Daily. It trades about 0.0 of its potential returns per unit of risk. Yuanta Daily Taiwan is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 13,080 in Yuanta Daily Taiwan on August 31, 2024 and sell it today you would earn a total of 9,645 from holding Yuanta Daily Taiwan or generate 73.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon FTSE Vietnam vs. Yuanta Daily Taiwan
Performance |
| Timeline |
| Fubon FTSE Vietnam |
| Yuanta Daily Taiwan |
Fubon FTSE and Yuanta Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon FTSE and Yuanta Daily
The main advantage of trading using opposite Fubon FTSE and Yuanta Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon FTSE position performs unexpectedly, Yuanta Daily 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 Daily will offset losses from the drop in Yuanta Daily's long position.| Fubon FTSE vs. Fubon Hang Seng | Fubon FTSE vs. Fubon SP Preferred | Fubon FTSE vs. Fubon NASDAQ 100 1X | Fubon FTSE vs. Fubon TWSE Corporate |
| Yuanta Daily vs. Yuanta Daily Taiwan | Yuanta Daily vs. Cathay Taiwan 5G | Yuanta Daily vs. Yuanta Daily CSI | Yuanta Daily 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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