Correlation Between TTET Union and Fubon Financial
Can any of the company-specific risk be diversified away by investing in both TTET Union and Fubon Financial 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 TTET Union and Fubon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TTET Union Corp and Fubon Financial Holding, you can compare the effects of market volatilities on TTET Union and Fubon Financial 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 TTET Union with a short position of Fubon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of TTET Union and Fubon Financial.
Diversification Opportunities for TTET Union and Fubon Financial
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TTET and Fubon is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding TTET Union Corp and Fubon Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon Financial Holding and TTET Union 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 TTET Union Corp are associated (or correlated) with Fubon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon Financial Holding has no effect on the direction of TTET Union i.e., TTET Union and Fubon Financial go up and down completely randomly.
Pair Corralation between TTET Union and Fubon Financial
Assuming the 90 days trading horizon TTET Union Corp is expected to generate 0.98 times more return on investment than Fubon Financial. However, TTET Union Corp is 1.02 times less risky than Fubon Financial. It trades about 0.28 of its potential returns per unit of risk. Fubon Financial Holding is currently generating about 0.02 per unit of risk. If you would invest 14,600 in TTET Union Corp on November 27, 2024 and sell it today you would earn a total of 650.00 from holding TTET Union Corp or generate 4.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TTET Union Corp vs. Fubon Financial Holding
Performance |
| Timeline |
| TTET Union Corp |
| Fubon Financial Holding |
TTET Union and Fubon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TTET Union and Fubon Financial
The main advantage of trading using opposite TTET Union and Fubon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TTET Union position performs unexpectedly, Fubon Financial 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 Financial will offset losses from the drop in Fubon Financial's long position.| TTET Union vs. Charoen Pokphand Enterprise | TTET Union vs. Standard Foods Corp | TTET Union vs. Uni President Enterprises Corp | TTET Union vs. Great Wall Enterprise |
| Fubon Financial vs. Asia Electronic Material | Fubon Financial vs. Chunghwa Telecom Co | Fubon Financial vs. Cheng Mei Materials | Fubon Financial vs. Kenda Rubber Industrial |
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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