Correlation Between ReaLy Development and Fubon Financial
Can any of the company-specific risk be diversified away by investing in both ReaLy Development 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 ReaLy Development and Fubon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ReaLy Development Construction and Fubon Financial Holding, you can compare the effects of market volatilities on ReaLy Development 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 ReaLy Development with a short position of Fubon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ReaLy Development and Fubon Financial.
Diversification Opportunities for ReaLy Development and Fubon Financial
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ReaLy and Fubon is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding ReaLy Development Construction 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 ReaLy Development 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 ReaLy Development Construction 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 ReaLy Development i.e., ReaLy Development and Fubon Financial go up and down completely randomly.
Pair Corralation between ReaLy Development and Fubon Financial
Assuming the 90 days trading horizon ReaLy Development Construction is expected to generate 12.59 times more return on investment than Fubon Financial. However, ReaLy Development is 12.59 times more volatile than Fubon Financial Holding. It trades about 0.05 of its potential returns per unit of risk. Fubon Financial Holding is currently generating about 0.26 per unit of risk. If you would invest 4,045 in ReaLy Development Construction on October 15, 2024 and sell it today you would earn a total of 55.00 from holding ReaLy Development Construction or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ReaLy Development Construction vs. Fubon Financial Holding
Performance |
| Timeline |
| ReaLy Development |
| Fubon Financial Holding |
ReaLy Development and Fubon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ReaLy Development and Fubon Financial
The main advantage of trading using opposite ReaLy Development and Fubon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ReaLy Development 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.| ReaLy Development vs. TMP Steel | ReaLy Development vs. Mayer Steel Pipe | ReaLy Development vs. Iron Force Industrial | ReaLy Development vs. Amulaire Thermal Technology |
| Fubon Financial vs. ReaLy Development Construction | Fubon Financial vs. LandMark Optoelectronics | Fubon Financial vs. Ruentex Engineering Construction | Fubon Financial vs. New Asia Construction |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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