Correlation Between Fubon Financial and Soonest Express
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Soonest Express 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 Soonest Express 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 Soonest Express Co, you can compare the effects of market volatilities on Fubon Financial and Soonest Express 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 Soonest Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Soonest Express.
Diversification Opportunities for Fubon Financial and Soonest Express
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fubon and Soonest is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Soonest Express Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soonest Express 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 Soonest Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soonest Express has no effect on the direction of Fubon Financial i.e., Fubon Financial and Soonest Express go up and down completely randomly.
Pair Corralation between Fubon Financial and Soonest Express
Assuming the 90 days trading horizon Fubon Financial is expected to generate 4.78 times less return on investment than Soonest Express. But when comparing it to its historical volatility, Fubon Financial Holding is 3.78 times less risky than Soonest Express. It trades about 0.36 of its potential returns per unit of risk. Soonest Express Co is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 7,380 in Soonest Express Co on December 9, 2024 and sell it today you would earn a total of 340.00 from holding Soonest Express Co or generate 4.61% 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. Soonest Express Co
Performance |
| Timeline |
| Fubon Financial Holding |
| Soonest Express |
Fubon Financial and Soonest Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and Soonest Express
The main advantage of trading using opposite Fubon Financial and Soonest Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Soonest Express 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 Soonest Express will offset losses from the drop in Soonest Express' long position.| Fubon Financial vs. EnTie Commercial Bank | ||
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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