Correlation Between Fubon Financial and AVer Information
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and AVer Information 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 AVer Information 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 AVer Information, you can compare the effects of market volatilities on Fubon Financial and AVer Information 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 AVer Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and AVer Information.
Diversification Opportunities for Fubon Financial and AVer Information
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and AVer is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and AVer Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVer Information 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 AVer Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVer Information has no effect on the direction of Fubon Financial i.e., Fubon Financial and AVer Information go up and down completely randomly.
Pair Corralation between Fubon Financial and AVer Information
Assuming the 90 days trading horizon Fubon Financial Holding is expected to generate 0.09 times more return on investment than AVer Information. However, Fubon Financial Holding is 11.42 times less risky than AVer Information. It trades about 0.3 of its potential returns per unit of risk. AVer Information is currently generating about -0.22 per unit of risk. If you would invest 6,020 in Fubon Financial Holding on October 20, 2024 and sell it today you would earn a total of 50.00 from holding Fubon Financial Holding or generate 0.83% 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. AVer Information
Performance |
| Timeline |
| Fubon Financial Holding |
| AVer Information |
Fubon Financial and AVer Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and AVer Information
The main advantage of trading using opposite Fubon Financial and AVer Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, AVer Information 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 AVer Information will offset losses from the drop in AVer Information's long position.| Fubon Financial vs. Tong Hwa Synthetic Fiber | Fubon Financial vs. Lian Hwa Foods | Fubon Financial vs. Johnson Chemical Pharmaceutical | Fubon Financial vs. Acelon Chemicals Fiber |
| AVer Information vs. Posiflex Technology | AVer Information vs. ANJI Technology Co | AVer Information vs. AzureWave Technologies | AVer Information vs. Yuan High Tech Development |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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