Correlation Between Fubon Financial and Walton Advanced
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Walton Advanced 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 Walton Advanced 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 Walton Advanced Engineering, you can compare the effects of market volatilities on Fubon Financial and Walton Advanced 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 Walton Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Walton Advanced.
Diversification Opportunities for Fubon Financial and Walton Advanced
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fubon and Walton is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Walton Advanced Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walton Advanced Engi 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 Walton Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walton Advanced Engi has no effect on the direction of Fubon Financial i.e., Fubon Financial and Walton Advanced go up and down completely randomly.
Pair Corralation between Fubon Financial and Walton Advanced
Assuming the 90 days trading horizon Fubon Financial Holding is expected to generate 0.06 times more return on investment than Walton Advanced. However, Fubon Financial Holding is 15.65 times less risky than Walton Advanced. It trades about 0.38 of its potential returns per unit of risk. Walton Advanced Engineering is currently generating about -0.08 per unit of risk. If you would invest 6,250 in Fubon Financial Holding on September 5, 2024 and sell it today you would earn a total of 60.00 from holding Fubon Financial Holding or generate 0.96% 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. Walton Advanced Engineering
Performance |
| Timeline |
| Fubon Financial Holding |
| Walton Advanced Engi |
Fubon Financial and Walton Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and Walton Advanced
The main advantage of trading using opposite Fubon Financial and Walton Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Walton Advanced 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 Walton Advanced will offset losses from the drop in Walton Advanced's long position.| Fubon Financial vs. Winstek Semiconductor Co | Fubon Financial vs. Chailease Holding Co | Fubon Financial vs. Powerchip Semiconductor Manufacturing | Fubon Financial vs. Advanced Wireless Semiconductor |
| Walton Advanced vs. Taiwan Semiconductor Manufacturing | Walton Advanced vs. Yang Ming Marine | Walton Advanced vs. AU Optronics | Walton Advanced vs. Nan Ya Plastics |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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