Correlation Between Fubon Financial and Tachan Securities
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Tachan Securities 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 Tachan Securities 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 Tachan Securities Co, you can compare the effects of market volatilities on Fubon Financial and Tachan Securities 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 Tachan Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Tachan Securities.
Diversification Opportunities for Fubon Financial and Tachan Securities
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and Tachan is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Tachan Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tachan Securities 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 Tachan Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tachan Securities has no effect on the direction of Fubon Financial i.e., Fubon Financial and Tachan Securities go up and down completely randomly.
Pair Corralation between Fubon Financial and Tachan Securities
Assuming the 90 days trading horizon Fubon Financial Holding is expected to generate 0.3 times more return on investment than Tachan Securities. However, Fubon Financial Holding is 3.31 times less risky than Tachan Securities. It trades about 0.31 of its potential returns per unit of risk. Tachan Securities Co is currently generating about 0.0 per unit of risk. If you would invest 6,250 in Fubon Financial Holding on September 4, 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 | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fubon Financial Holding vs. Tachan Securities Co
Performance |
| Timeline |
| Fubon Financial Holding |
| Tachan Securities |
Fubon Financial and Tachan Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and Tachan Securities
The main advantage of trading using opposite Fubon Financial and Tachan Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Tachan Securities 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 Tachan Securities will offset losses from the drop in Tachan Securities' long position.| Fubon Financial vs. Chinese Maritime Transport | Fubon Financial vs. Grand Ocean Retail | Fubon Financial vs. Niko Semiconductor Co | Fubon Financial vs. Vanguard International Semiconductor |
| Tachan Securities vs. IBF Financial Holdings | Tachan Securities vs. Capital Securities Corp | Tachan Securities vs. President Securities Corp | Tachan Securities vs. China Bills Finance |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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