Correlation Between Fubon Financial and Sunnic Technology
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Sunnic Technology 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 Sunnic Technology 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 Sunnic Technology Merchandise, you can compare the effects of market volatilities on Fubon Financial and Sunnic Technology 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 Sunnic Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Sunnic Technology.
Diversification Opportunities for Fubon Financial and Sunnic Technology
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fubon and Sunnic is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Sunnic Technology Merchandise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunnic Technology 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 Sunnic Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunnic Technology has no effect on the direction of Fubon Financial i.e., Fubon Financial and Sunnic Technology go up and down completely randomly.
Pair Corralation between Fubon Financial and Sunnic Technology
Assuming the 90 days trading horizon Fubon Financial Holding is expected to generate 0.41 times more return on investment than Sunnic Technology. However, Fubon Financial Holding is 2.42 times less risky than Sunnic Technology. It trades about -0.08 of its potential returns per unit of risk. Sunnic Technology Merchandise is currently generating about -0.22 per unit of risk. If you would invest 9,190 in Fubon Financial Holding on August 29, 2024 and sell it today you would lose (180.00) from holding Fubon Financial Holding or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon Financial Holding vs. Sunnic Technology Merchandise
Performance |
| Timeline |
| Fubon Financial Holding |
| Sunnic Technology |
Fubon Financial and Sunnic Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and Sunnic Technology
The main advantage of trading using opposite Fubon Financial and Sunnic Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Sunnic Technology 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 Sunnic Technology will offset losses from the drop in Sunnic Technology's long position.| Fubon Financial vs. Taiwan Secom Co | Fubon Financial vs. TTET Union Corp | Fubon Financial vs. China Steel Chemical | Fubon Financial vs. Taiwan Shin Kong |
| Sunnic Technology vs. RiTdisplay Corp | Sunnic Technology vs. Great Computer | Sunnic Technology vs. Ma Kuang Healthcare | Sunnic Technology vs. Loop Telecommunication International |
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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