Correlation Between Fubon Financial and Grand Fortune
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Grand Fortune 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 Grand Fortune 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 Grand Fortune Securities, you can compare the effects of market volatilities on Fubon Financial and Grand Fortune 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 Grand Fortune. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Grand Fortune.
Diversification Opportunities for Fubon Financial and Grand Fortune
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fubon and Grand is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Grand Fortune Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Fortune 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 Grand Fortune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Fortune Securities has no effect on the direction of Fubon Financial i.e., Fubon Financial and Grand Fortune go up and down completely randomly.
Pair Corralation between Fubon Financial and Grand Fortune
Assuming the 90 days trading horizon Fubon Financial is expected to generate 1.5 times less return on investment than Grand Fortune. But when comparing it to its historical volatility, Fubon Financial Holding is 5.43 times less risky than Grand Fortune. It trades about 0.11 of its potential returns per unit of risk. Grand Fortune Securities is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,220 in Grand Fortune Securities on October 20, 2024 and sell it today you would earn a total of 5.00 from holding Grand Fortune Securities or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fubon Financial Holding vs. Grand Fortune Securities
Performance |
| Timeline |
| Fubon Financial Holding |
| Grand Fortune Securities |
Fubon Financial and Grand Fortune Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and Grand Fortune
The main advantage of trading using opposite Fubon Financial and Grand Fortune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Grand Fortune 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 Grand Fortune will offset losses from the drop in Grand Fortune's long position.| Fubon Financial vs. Wonderful Hi Tech Co | Fubon Financial vs. Asustek Computer | Fubon Financial vs. Compal Broadband Networks | Fubon Financial vs. Silicon Power Computer |
| Grand Fortune vs. Yeou Yih Steel | Grand Fortune vs. Forest Water Environmental | Grand Fortune vs. Century Iron And | Grand Fortune vs. Wei Chih Steel |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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