Correlation Between Fubon Financial and SYN Tech
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and SYN Tech 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 SYN Tech 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 SYN Tech Chem Pharm, you can compare the effects of market volatilities on Fubon Financial and SYN Tech 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 SYN Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and SYN Tech.
Diversification Opportunities for Fubon Financial and SYN Tech
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fubon and SYN is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and SYN Tech Chem Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYN Tech Chem 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 SYN Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYN Tech Chem has no effect on the direction of Fubon Financial i.e., Fubon Financial and SYN Tech go up and down completely randomly.
Pair Corralation between Fubon Financial and SYN Tech
Assuming the 90 days trading horizon Fubon Financial is expected to generate 10.41 times less return on investment than SYN Tech. But when comparing it to its historical volatility, Fubon Financial Holding is 3.88 times less risky than SYN Tech. It trades about 0.02 of its potential returns per unit of risk. SYN Tech Chem Pharm is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7,673 in SYN Tech Chem Pharm on August 31, 2024 and sell it today you would earn a total of 2,047 from holding SYN Tech Chem Pharm or generate 26.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Fubon Financial Holding vs. SYN Tech Chem Pharm
Performance |
| Timeline |
| Fubon Financial Holding |
| SYN Tech Chem |
Fubon Financial and SYN Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and SYN Tech
The main advantage of trading using opposite Fubon Financial and SYN Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, SYN Tech 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 SYN Tech will offset losses from the drop in SYN Tech's long position.| Fubon Financial vs. Lien Chang Electronic | Fubon Financial vs. Taisol Electronics Co | Fubon Financial vs. Tung Thih Electronic | Fubon Financial vs. WT Microelectronics Co |
| SYN Tech vs. MedFirst Healthcare Services | SYN Tech vs. Pacific Hospital Supply | SYN Tech vs. Great China Metal | SYN Tech vs. China Airlines |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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