Correlation Between Fubon Financial and Wayi International
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Wayi International 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 Wayi International 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 Wayi International Digital, you can compare the effects of market volatilities on Fubon Financial and Wayi International 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 Wayi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Wayi International.
Diversification Opportunities for Fubon Financial and Wayi International
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fubon and Wayi is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Wayi International Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayi International 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 Wayi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wayi International has no effect on the direction of Fubon Financial i.e., Fubon Financial and Wayi International go up and down completely randomly.
Pair Corralation between Fubon Financial and Wayi International
Assuming the 90 days trading horizon Fubon Financial Holding is expected to generate 0.02 times more return on investment than Wayi International. However, Fubon Financial Holding is 41.53 times less risky than Wayi International. It trades about 0.25 of its potential returns per unit of risk. Wayi International Digital is currently generating about -0.05 per unit of risk. If you would invest 6,190 in Fubon Financial Holding on September 3, 2024 and sell it today you would earn a total of 90.00 from holding Fubon Financial Holding or generate 1.45% 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. Wayi International Digital
Performance |
| Timeline |
| Fubon Financial Holding |
| Wayi International |
Fubon Financial and Wayi International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and Wayi International
The main advantage of trading using opposite Fubon Financial and Wayi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Wayi International 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 Wayi International will offset losses from the drop in Wayi International's long position.| Fubon Financial vs. Arima Communications Corp | Fubon Financial vs. Gamania Digital Entertainment | Fubon Financial vs. Tehmag Foods | Fubon Financial vs. U Tech Media Corp |
| Wayi International vs. Shan Loong Transportation Co | Wayi International vs. Daxin Materials Corp | Wayi International vs. Medigen Biotechnology | Wayi International vs. Eternal Materials Co |
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 Stocks Directory module to find actively traded stocks across global markets.
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