Correlation Between Fubon Financial and Provision Information
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Provision Information 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 Provision Information 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 Provision Information CoLtd, you can compare the effects of market volatilities on Fubon Financial and Provision Information 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 Provision Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Provision Information.
Diversification Opportunities for Fubon Financial and Provision Information
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fubon and Provision is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Provision Information CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Provision Information 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 Provision Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Provision Information has no effect on the direction of Fubon Financial i.e., Fubon Financial and Provision Information go up and down completely randomly.
Pair Corralation between Fubon Financial and Provision Information
Assuming the 90 days trading horizon Fubon Financial Holding is expected to generate 0.89 times more return on investment than Provision Information. However, Fubon Financial Holding is 1.12 times less risky than Provision Information. It trades about 0.11 of its potential returns per unit of risk. Provision Information CoLtd is currently generating about -0.02 per unit of risk. If you would invest 6,350 in Fubon Financial Holding on September 15, 2024 and sell it today you would earn a total of 3,010 from holding Fubon Financial Holding or generate 47.4% 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. Provision Information CoLtd
Performance |
| Timeline |
| Fubon Financial Holding |
| Provision Information |
Fubon Financial and Provision Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and Provision Information
The main advantage of trading using opposite Fubon Financial and Provision Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Provision Information 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 Provision Information will offset losses from the drop in Provision Information's long position.| Fubon Financial vs. Central Reinsurance Corp | Fubon Financial vs. Huaku Development Co | Fubon Financial vs. Chailease Holding Co | Fubon Financial vs. CTBC Financial Holding |
| Provision Information vs. Union Insurance Co | Provision Information vs. Air Asia Co | Provision Information vs. Fubon Financial Holding | Provision Information vs. Pontex Polyblend CoLtd |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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