Correlation Between Fubon Financial and Hu Lane
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Hu Lane 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 Hu Lane 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 Hu Lane Associate, you can compare the effects of market volatilities on Fubon Financial and Hu Lane 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 Hu Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Hu Lane.
Diversification Opportunities for Fubon Financial and Hu Lane
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fubon and 6279 is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Hu Lane Associate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hu Lane Associate 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 Hu Lane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hu Lane Associate has no effect on the direction of Fubon Financial i.e., Fubon Financial and Hu Lane go up and down completely randomly.
Pair Corralation between Fubon Financial and Hu Lane
Assuming the 90 days trading horizon Fubon Financial Holding is expected to generate 0.04 times more return on investment than Hu Lane. However, Fubon Financial Holding is 25.16 times less risky than Hu Lane. It trades about -0.09 of its potential returns per unit of risk. Hu Lane Associate is currently generating about -0.04 per unit of risk. If you would invest 6,010 in Fubon Financial Holding on September 1, 2024 and sell it today you would lose (10.00) from holding Fubon Financial Holding or give up 0.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon Financial Holding vs. Hu Lane Associate
Performance |
| Timeline |
| Fubon Financial Holding |
| Hu Lane Associate |
Fubon Financial and Hu Lane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and Hu Lane
The main advantage of trading using opposite Fubon Financial and Hu Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Hu Lane 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 Hu Lane will offset losses from the drop in Hu Lane'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 |
| Hu Lane vs. BizLink Holding | Hu Lane vs. Hota Industrial Mfg | Hu Lane vs. Tung Thih Electronic | Hu Lane vs. Actron Technology |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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