Correlation Between Fubon Financial and Hota Industrial
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Hota Industrial 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 Hota Industrial 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 Hota Industrial Mfg, you can compare the effects of market volatilities on Fubon Financial and Hota Industrial 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 Hota Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Hota Industrial.
Diversification Opportunities for Fubon Financial and Hota Industrial
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fubon and Hota is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Hota Industrial Mfg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hota Industrial Mfg 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 Hota Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hota Industrial Mfg has no effect on the direction of Fubon Financial i.e., Fubon Financial and Hota Industrial go up and down completely randomly.
Pair Corralation between Fubon Financial and Hota Industrial
Assuming the 90 days trading horizon Fubon Financial Holding is expected to under-perform the Hota Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Fubon Financial Holding is 47.84 times less risky than Hota Industrial. The stock trades about -0.09 of its potential returns per unit of risk. The Hota Industrial Mfg is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 5,580 in Hota Industrial Mfg on September 1, 2024 and sell it today you would earn a total of 880.00 from holding Hota Industrial Mfg or generate 15.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon Financial Holding vs. Hota Industrial Mfg
Performance |
| Timeline |
| Fubon Financial Holding |
| Hota Industrial Mfg |
Fubon Financial and Hota Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and Hota Industrial
The main advantage of trading using opposite Fubon Financial and Hota Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Hota Industrial 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 Hota Industrial will offset losses from the drop in Hota Industrial's long position.| Fubon Financial vs. Fu Burg Industrial | Fubon Financial vs. Unique Optical Industrial | Fubon Financial vs. Tex Ray Industrial Co | Fubon Financial vs. Chialin Precision Industrial |
| Hota Industrial vs. Chaintech Technology Corp | Hota Industrial vs. AVerMedia Technologies | Hota Industrial vs. Avision | Hota Industrial vs. Clevo Co |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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