Correlation Between Fubon Financial and Niko Semiconductor
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Niko Semiconductor 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 Niko Semiconductor 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 Niko Semiconductor Co, you can compare the effects of market volatilities on Fubon Financial and Niko Semiconductor 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 Niko Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Niko Semiconductor.
Diversification Opportunities for Fubon Financial and Niko Semiconductor
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fubon and Niko is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Niko Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niko Semiconductor 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 Niko Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niko Semiconductor has no effect on the direction of Fubon Financial i.e., Fubon Financial and Niko Semiconductor go up and down completely randomly.
Pair Corralation between Fubon Financial and Niko Semiconductor
Assuming the 90 days trading horizon Fubon Financial Holding is expected to under-perform the Niko Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Fubon Financial Holding is 2.16 times less risky than Niko Semiconductor. The stock trades about -0.09 of its potential returns per unit of risk. The Niko Semiconductor Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,690 in Niko Semiconductor Co on August 28, 2024 and sell it today you would earn a total of 390.00 from holding Niko Semiconductor Co or generate 8.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon Financial Holding vs. Niko Semiconductor Co
Performance |
| Timeline |
| Fubon Financial Holding |
| Niko Semiconductor |
Fubon Financial and Niko Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and Niko Semiconductor
The main advantage of trading using opposite Fubon Financial and Niko Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Niko Semiconductor 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 Niko Semiconductor will offset losses from the drop in Niko Semiconductor's long position.| Fubon Financial vs. Tait Marketing Distribution | Fubon Financial vs. Cameo Communications | Fubon Financial vs. Ligitek Electronics Co | Fubon Financial vs. Excellence Optoelectronic |
| Niko Semiconductor vs. Global Unichip Corp | Niko Semiconductor vs. Asmedia Technology | Niko Semiconductor vs. Unimicron Technology Corp | Niko Semiconductor vs. Novatek Microelectronics Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |