Correlation Between Fubon Financial and Yieh United
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Yieh United 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 Yieh United 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 Yieh United Steel, you can compare the effects of market volatilities on Fubon Financial and Yieh United 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 Yieh United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Yieh United.
Diversification Opportunities for Fubon Financial and Yieh United
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and Yieh is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Yieh United Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yieh United Steel 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 Yieh United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yieh United Steel has no effect on the direction of Fubon Financial i.e., Fubon Financial and Yieh United go up and down completely randomly.
Pair Corralation between Fubon Financial and Yieh United
Assuming the 90 days trading horizon Fubon Financial Holding is expected to generate 0.47 times more return on investment than Yieh United. However, Fubon Financial Holding is 2.11 times less risky than Yieh United. It trades about 0.0 of its potential returns per unit of risk. Yieh United Steel is currently generating about -0.02 per unit of risk. If you would invest 6,290 in Fubon Financial Holding on September 2, 2024 and sell it today you would lose (10.00) from holding Fubon Financial Holding or give up 0.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon Financial Holding vs. Yieh United Steel
Performance |
| Timeline |
| Fubon Financial Holding |
| Yieh United Steel |
Fubon Financial and Yieh United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and Yieh United
The main advantage of trading using opposite Fubon Financial and Yieh United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Yieh United 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 Yieh United will offset losses from the drop in Yieh United's long position.| Fubon Financial vs. Taiwan Cooperative Financial | Fubon Financial vs. Hannstar Display Corp | Fubon Financial vs. RiTdisplay Corp | Fubon Financial vs. Sinopac Financial Holdings |
| Yieh United vs. Basso Industry Corp | Yieh United vs. Chung Hsin Electric Machinery | Yieh United vs. TYC Brother Industrial | Yieh United vs. TECO Electric Machinery |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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