Correlation Between Fubon Financial and ReaLy Development
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and ReaLy Development 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 ReaLy Development 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 ReaLy Development Construction, you can compare the effects of market volatilities on Fubon Financial and ReaLy Development 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 ReaLy Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and ReaLy Development.
Diversification Opportunities for Fubon Financial and ReaLy Development
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fubon and ReaLy is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and ReaLy Development Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReaLy Development 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 ReaLy Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReaLy Development has no effect on the direction of Fubon Financial i.e., Fubon Financial and ReaLy Development go up and down completely randomly.
Pair Corralation between Fubon Financial and ReaLy Development
Assuming the 90 days trading horizon Fubon Financial Holding is expected to under-perform the ReaLy Development. But the stock apears to be less risky and, when comparing its historical volatility, Fubon Financial Holding is 21.25 times less risky than ReaLy Development. The stock trades about -0.09 of its potential returns per unit of risk. The ReaLy Development Construction is currently generating about 0.53 of returns per unit of risk over similar time horizon. If you would invest 3,400 in ReaLy Development Construction on September 1, 2024 and sell it today you would earn a total of 735.00 from holding ReaLy Development Construction or generate 21.62% 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. ReaLy Development Construction
Performance |
| Timeline |
| Fubon Financial Holding |
| ReaLy Development |
Fubon Financial and ReaLy Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and ReaLy Development
The main advantage of trading using opposite Fubon Financial and ReaLy Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, ReaLy Development 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 ReaLy Development will offset losses from the drop in ReaLy Development'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 |
| ReaLy Development vs. Loop Telecommunication International | ReaLy Development vs. Unitech Computer Co | ReaLy Development vs. U Ming Marine Transport | ReaLy Development vs. Far EasTone Telecommunications |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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