Correlation Between Fuh Hwa and YuantaP Shares
Can any of the company-specific risk be diversified away by investing in both Fuh Hwa and YuantaP Shares 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 YuantaP Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fuh Hwa Taiwan and YuantaP shares Taiwan Top, you can compare the effects of market volatilities on Fuh Hwa and YuantaP Shares 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 YuantaP Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuh Hwa and YuantaP Shares.
Diversification Opportunities for Fuh Hwa and YuantaP Shares
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fuh and YuantaP is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Fuh Hwa Taiwan and YuantaP shares Taiwan Top in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YuantaP shares Taiwan 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 Taiwan are associated (or correlated) with YuantaP Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YuantaP shares Taiwan has no effect on the direction of Fuh Hwa i.e., Fuh Hwa and YuantaP Shares go up and down completely randomly.
Pair Corralation between Fuh Hwa and YuantaP Shares
Assuming the 90 days trading horizon Fuh Hwa Taiwan is expected to under-perform the YuantaP Shares. But the etf apears to be less risky and, when comparing its historical volatility, Fuh Hwa Taiwan is 1.6 times less risky than YuantaP Shares. The etf trades about -0.13 of its potential returns per unit of risk. The YuantaP shares Taiwan Top is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 19,295 in YuantaP shares Taiwan Top on September 5, 2024 and sell it today you would earn a total of 135.00 from holding YuantaP shares Taiwan Top or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuh Hwa Taiwan vs. YuantaP shares Taiwan Top
Performance |
| Timeline |
| Fuh Hwa Taiwan |
| YuantaP shares Taiwan |
Fuh Hwa and YuantaP Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuh Hwa and YuantaP Shares
The main advantage of trading using opposite Fuh Hwa and YuantaP Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuh Hwa position performs unexpectedly, YuantaP Shares 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 YuantaP Shares will offset losses from the drop in YuantaP Shares' 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 |
| YuantaP Shares vs. Ruentex Development Co | YuantaP Shares vs. Symtek Automation Asia | YuantaP Shares vs. CTCI Corp | YuantaP Shares vs. Information Technology Total |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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