Correlation Between Fubon Financial and Topco Technologies
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Topco Technologies 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 Topco Technologies 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 Topco Technologies, you can compare the effects of market volatilities on Fubon Financial and Topco Technologies 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 Topco Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Topco Technologies.
Diversification Opportunities for Fubon Financial and Topco Technologies
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and Topco is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Topco Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Topco Technologies 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 Topco Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Topco Technologies has no effect on the direction of Fubon Financial i.e., Fubon Financial and Topco Technologies go up and down completely randomly.
Pair Corralation between Fubon Financial and Topco Technologies
Assuming the 90 days trading horizon Fubon Financial is expected to generate 3.25 times less return on investment than Topco Technologies. But when comparing it to its historical volatility, Fubon Financial Holding is 3.07 times less risky than Topco Technologies. It trades about 0.29 of its potential returns per unit of risk. Topco Technologies is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 6,790 in Topco Technologies on December 1, 2024 and sell it today you would earn a total of 140.00 from holding Topco Technologies or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon Financial Holding vs. Topco Technologies
Performance |
| Timeline |
| Fubon Financial Holding |
| Topco Technologies |
Fubon Financial and Topco Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and Topco Technologies
The main advantage of trading using opposite Fubon Financial and Topco Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Topco Technologies 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 Topco Technologies will offset losses from the drop in Topco Technologies' long position.| Fubon Financial vs. Castles Technology Co | Fubon Financial vs. International Games System | Fubon Financial vs. Feng Ching Metal | Fubon Financial vs. ANJI Technology Co |
| Topco Technologies vs. Evergreen International Storage | Topco Technologies vs. Everlight Electronics Co | Topco Technologies vs. Lelon Electronics Corp | Topco Technologies vs. Apex Biotechnology Corp |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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