Correlation Between Chinese Maritime and Fubon Financial
Can any of the company-specific risk be diversified away by investing in both Chinese Maritime 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 Chinese Maritime and Fubon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chinese Maritime Transport and Fubon Financial Holding, you can compare the effects of market volatilities on Chinese Maritime 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 Chinese Maritime with a short position of Fubon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Maritime and Fubon Financial.
Diversification Opportunities for Chinese Maritime and Fubon Financial
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chinese and Fubon is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Maritime Transport 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 Chinese Maritime 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 Chinese Maritime Transport 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 Chinese Maritime i.e., Chinese Maritime and Fubon Financial go up and down completely randomly.
Pair Corralation between Chinese Maritime and Fubon Financial
Assuming the 90 days trading horizon Chinese Maritime Transport is expected to generate 18.02 times more return on investment than Fubon Financial. However, Chinese Maritime is 18.02 times more volatile than Fubon Financial Holding. It trades about 0.02 of its potential returns per unit of risk. Fubon Financial Holding is currently generating about 0.31 per unit of risk. If you would invest 4,235 in Chinese Maritime Transport on September 4, 2024 and sell it today you would earn a total of 25.00 from holding Chinese Maritime Transport or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chinese Maritime Transport vs. Fubon Financial Holding
Performance |
| Timeline |
| Chinese Maritime Tra |
| Fubon Financial Holding |
Chinese Maritime and Fubon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Maritime and Fubon Financial
The main advantage of trading using opposite Chinese Maritime and Fubon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Maritime 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.| Chinese Maritime vs. Universal Microelectronics Co | Chinese Maritime vs. AVerMedia Technologies | Chinese Maritime vs. Symtek Automation Asia | Chinese Maritime vs. WiseChip Semiconductor |
| Fubon Financial vs. Chinese Maritime Transport | Fubon Financial vs. Grand Ocean Retail | Fubon Financial vs. Niko Semiconductor Co | Fubon Financial vs. Vanguard International Semiconductor |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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