Correlation Between CTBC Financial and Fubon Financial
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and Fubon Financial 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 CTBC Financial and Fubon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTBC Financial Holding and Fubon Financial Holding, you can compare the effects of market volatilities on CTBC Financial and Fubon Financial 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 CTBC Financial with a short position of Fubon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and Fubon Financial.
Diversification Opportunities for CTBC Financial and Fubon Financial
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CTBC and Fubon is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and Fubon Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon Financial Holding and CTBC 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 CTBC Financial Holding are associated (or correlated) with Fubon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon Financial Holding has no effect on the direction of CTBC Financial i.e., CTBC Financial and Fubon Financial go up and down completely randomly.
Pair Corralation between CTBC Financial and Fubon Financial
If you would invest 6,070 in CTBC Financial Holding on August 25, 2024 and sell it today you would earn a total of 10.00 from holding CTBC Financial Holding or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTBC Financial Holding vs. Fubon Financial Holding
Performance |
| Timeline |
| CTBC Financial Holding |
| Fubon Financial Holding |
CTBC Financial and Fubon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTBC Financial and Fubon Financial
The main advantage of trading using opposite CTBC Financial and Fubon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, Fubon Financial 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 Fubon Financial will offset losses from the drop in Fubon Financial's long position.| CTBC Financial vs. uPI Semiconductor Corp | CTBC Financial vs. Elite Semiconductor Memory | CTBC Financial vs. Eastern Media International | CTBC Financial vs. Softstar Entertainment |
| Fubon Financial vs. CTBC Financial Holding | Fubon Financial vs. YuantaP shares Taiwan Top | Fubon Financial vs. YuantaP shares Taiwan Mid Cap | Fubon Financial vs. YuantaP shares Taiwan Electronics |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |