Correlation Between Fubon Financial and Kworld Computer
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Kworld Computer 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 Kworld Computer 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 Kworld Computer Co, you can compare the effects of market volatilities on Fubon Financial and Kworld Computer 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 Kworld Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Kworld Computer.
Diversification Opportunities for Fubon Financial and Kworld Computer
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and Kworld is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Kworld Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kworld Computer 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 Kworld Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kworld Computer has no effect on the direction of Fubon Financial i.e., Fubon Financial and Kworld Computer go up and down completely randomly.
Pair Corralation between Fubon Financial and Kworld Computer
Assuming the 90 days trading horizon Fubon Financial is expected to generate 22.12 times less return on investment than Kworld Computer. But when comparing it to its historical volatility, Fubon Financial Holding is 11.99 times less risky than Kworld Computer. It trades about 0.03 of its potential returns per unit of risk. Kworld Computer Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,600 in Kworld Computer Co on September 1, 2024 and sell it today you would earn a total of 1,795 from holding Kworld Computer Co or generate 112.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon Financial Holding vs. Kworld Computer Co
Performance |
| Timeline |
| Fubon Financial Holding |
| Kworld Computer |
Fubon Financial and Kworld Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and Kworld Computer
The main advantage of trading using opposite Fubon Financial and Kworld Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Kworld Computer 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 Kworld Computer will offset losses from the drop in Kworld Computer'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 |
| Kworld Computer vs. GrandTech CG Systems | Kworld Computer vs. Xander International | Kworld Computer vs. MetaTech AP | Kworld Computer vs. Weblink International |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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