Correlation Between Fubon Financial and Chailease Holding
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Chailease Holding 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 Chailease Holding 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 Chailease Holding Co, you can compare the effects of market volatilities on Fubon Financial and Chailease Holding 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 Chailease Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Chailease Holding.
Diversification Opportunities for Fubon Financial and Chailease Holding
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fubon and Chailease is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Chailease Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chailease 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 Chailease Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chailease Holding has no effect on the direction of Fubon Financial i.e., Fubon Financial and Chailease Holding go up and down completely randomly.
Pair Corralation between Fubon Financial and Chailease Holding
Assuming the 90 days trading horizon Fubon Financial Holding is expected to generate 0.41 times more return on investment than Chailease Holding. However, Fubon Financial Holding is 2.45 times less risky than Chailease Holding. It trades about -0.07 of its potential returns per unit of risk. Chailease Holding Co is currently generating about -0.43 per unit of risk. If you would invest 9,190 in Fubon Financial Holding on August 28, 2024 and sell it today you would lose (140.00) from holding Fubon Financial Holding or give up 1.52% 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. Chailease Holding Co
Performance |
| Timeline |
| Fubon Financial Holding |
| Chailease Holding |
Fubon Financial and Chailease Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and Chailease Holding
The main advantage of trading using opposite Fubon Financial and Chailease Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Chailease Holding 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 Chailease Holding will offset losses from the drop in Chailease Holding's long position.| Fubon Financial vs. Healthconn Corp | Fubon Financial vs. General Plastic Industrial | Fubon Financial vs. Eternal Materials Co | Fubon Financial vs. Asia Electronic Material |
| Chailease Holding vs. Fubon Financial Holding | Chailease Holding vs. CTBC Financial Holding | Chailease Holding vs. Mega Financial Holding | Chailease Holding vs. Cathay Financial Holding |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |