Correlation Between Fubon Financial and Taishin Financial
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Taishin 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 Fubon Financial and Taishin Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fubon Financial Holding and Taishin Financial Holding, you can compare the effects of market volatilities on Fubon Financial and Taishin 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 Fubon Financial with a short position of Taishin Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Taishin Financial.
Diversification Opportunities for Fubon Financial and Taishin Financial
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fubon and Taishin is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Taishin Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taishin Financial Holding and Fubon Financial 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 Financial Holding are associated (or correlated) with Taishin Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taishin Financial Holding has no effect on the direction of Fubon Financial i.e., Fubon Financial and Taishin Financial go up and down completely randomly.
Pair Corralation between Fubon Financial and Taishin Financial
Assuming the 90 days trading horizon Fubon Financial Holding is expected to under-perform the Taishin Financial. In addition to that, Fubon Financial is 4.38 times more volatile than Taishin Financial Holding. It trades about -0.1 of its total potential returns per unit of risk. Taishin Financial Holding is currently generating about -0.04 per unit of volatility. If you would invest 5,110 in Taishin Financial Holding on August 25, 2024 and sell it today you would lose (10.00) from holding Taishin Financial Holding or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon Financial Holding vs. Taishin Financial Holding
Performance |
| Timeline |
| Fubon Financial Holding |
| Taishin Financial Holding |
Fubon Financial and Taishin Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and Taishin Financial
The main advantage of trading using opposite Fubon Financial and Taishin Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Taishin 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 Taishin Financial will offset losses from the drop in Taishin Financial's long position.| Fubon Financial vs. Tai Tung Communication | Fubon Financial vs. Tang Eng Iron | Fubon Financial vs. Cameo Communications | Fubon Financial vs. Chung Hung Steel |
| Taishin Financial vs. Mega Financial Holding | Taishin Financial vs. Taiwan Cooperative Financial | Taishin Financial vs. ESUN Financial Holding | Taishin Financial vs. Hua Nan Financial |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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