Correlation Between Fubon Financial and XAC Automation
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and XAC Automation 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 XAC Automation 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 XAC Automation, you can compare the effects of market volatilities on Fubon Financial and XAC Automation 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 XAC Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and XAC Automation.
Diversification Opportunities for Fubon Financial and XAC Automation
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and XAC is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and XAC Automation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XAC Automation 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 XAC Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XAC Automation has no effect on the direction of Fubon Financial i.e., Fubon Financial and XAC Automation go up and down completely randomly.
Pair Corralation between Fubon Financial and XAC Automation
Assuming the 90 days trading horizon Fubon Financial Holding is expected to generate 0.14 times more return on investment than XAC Automation. However, Fubon Financial Holding is 7.13 times less risky than XAC Automation. It trades about 0.02 of its potential returns per unit of risk. XAC Automation is currently generating about -0.03 per unit of risk. If you would invest 5,950 in Fubon Financial Holding on September 3, 2024 and sell it today you would earn a total of 50.00 from holding Fubon Financial Holding or generate 0.84% 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. XAC Automation
Performance |
| Timeline |
| Fubon Financial Holding |
| XAC Automation |
Fubon Financial and XAC Automation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and XAC Automation
The main advantage of trading using opposite Fubon Financial and XAC Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, XAC Automation 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 XAC Automation will offset losses from the drop in XAC Automation's long position.| Fubon Financial vs. YuantaP shares Taiwan Electronics | Fubon Financial vs. YuantaP shares Taiwan Mid Cap | Fubon Financial vs. Fubon MSCI Taiwan | Fubon Financial vs. YuantaP shares Taiwan Top |
| XAC Automation vs. Chinese Maritime Transport | XAC Automation vs. Lian Hwa Foods | XAC Automation vs. Emerging Display Technologies | XAC Automation vs. Mercuries Life Insurance |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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