Correlation Between Fubon Financial and Swancor Holding
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Swancor Holding 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 Swancor Holding 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 Swancor Holding Co, you can compare the effects of market volatilities on Fubon Financial and Swancor Holding 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 Swancor Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Swancor Holding.
Diversification Opportunities for Fubon Financial and Swancor Holding
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fubon and Swancor is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Swancor Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swancor Holding 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 Swancor Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swancor Holding has no effect on the direction of Fubon Financial i.e., Fubon Financial and Swancor Holding go up and down completely randomly.
Pair Corralation between Fubon Financial and Swancor Holding
Assuming the 90 days trading horizon Fubon Financial is expected to generate 4.55 times less return on investment than Swancor Holding. But when comparing it to its historical volatility, Fubon Financial Holding is 5.59 times less risky than Swancor Holding. It trades about 0.01 of its potential returns per unit of risk. Swancor Holding Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 9,670 in Swancor Holding Co on August 31, 2024 and sell it today you would lose (170.00) from holding Swancor Holding Co or give up 1.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Fubon Financial Holding vs. Swancor Holding Co
Performance |
| Timeline |
| Fubon Financial Holding |
| Swancor Holding |
Fubon Financial and Swancor Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and Swancor Holding
The main advantage of trading using opposite Fubon Financial and Swancor Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Swancor Holding 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 Swancor Holding will offset losses from the drop in Swancor Holding's long position.| Fubon Financial vs. Shinkong Synthetic Fiber | Fubon Financial vs. Central Reinsurance Corp | Fubon Financial vs. Chung Hwa Chemical | Fubon Financial vs. Grand Pacific Petrochemical |
| Swancor Holding vs. Century Iron And | Swancor Holding vs. Yeong Guan Energy | Swancor Holding vs. Chung Hsin Electric Machinery | Swancor Holding vs. Unimicron Technology 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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