Correlation Between Fubon Financial and Kings Town
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Kings Town 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 Kings Town 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 Kings Town Bank, you can compare the effects of market volatilities on Fubon Financial and Kings Town 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 Kings Town. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Kings Town.
Diversification Opportunities for Fubon Financial and Kings Town
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fubon and Kings is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Kings Town Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kings Town Bank 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 Kings Town. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kings Town Bank has no effect on the direction of Fubon Financial i.e., Fubon Financial and Kings Town go up and down completely randomly.
Pair Corralation between Fubon Financial and Kings Town
Assuming the 90 days trading horizon Fubon Financial Holding is expected to generate 0.06 times more return on investment than Kings Town. However, Fubon Financial Holding is 17.19 times less risky than Kings Town. It trades about 0.31 of its potential returns per unit of risk. Kings Town Bank is currently generating about -0.05 per unit of risk. If you would invest 6,240 in Fubon Financial Holding on September 1, 2024 and sell it today you would earn a total of 40.00 from holding Fubon Financial Holding or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon Financial Holding vs. Kings Town Bank
Performance |
| Timeline |
| Fubon Financial Holding |
| Kings Town Bank |
Fubon Financial and Kings Town Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and Kings Town
The main advantage of trading using opposite Fubon Financial and Kings Town positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Kings Town 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 Kings Town will offset losses from the drop in Kings Town's long position.| Fubon Financial vs. Healthconn Corp | Fubon Financial vs. Easywell Biomedicals | Fubon Financial vs. Simple Mart Retail | Fubon Financial vs. Grand Ocean Retail |
| Kings Town vs. Taichung Commercial Bank | Kings Town vs. Far Eastern International | Kings Town vs. Taiwan Business Bank | Kings Town vs. Sinopac Financial Holdings |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |