Correlation Between Mercuries Associates and Fubon Financial
Can any of the company-specific risk be diversified away by investing in both Mercuries Associates 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 Mercuries Associates and Fubon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercuries Associates Holding and Fubon Financial Holding, you can compare the effects of market volatilities on Mercuries Associates 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 Mercuries Associates with a short position of Fubon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercuries Associates and Fubon Financial.
Diversification Opportunities for Mercuries Associates and Fubon Financial
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mercuries and Fubon is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Mercuries Associates 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 Mercuries Associates 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 Mercuries Associates 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 Mercuries Associates i.e., Mercuries Associates and Fubon Financial go up and down completely randomly.
Pair Corralation between Mercuries Associates and Fubon Financial
Assuming the 90 days trading horizon Mercuries Associates Holding is expected to under-perform the Fubon Financial. In addition to that, Mercuries Associates is 18.48 times more volatile than Fubon Financial Holding. It trades about -0.11 of its total potential returns per unit of risk. Fubon Financial Holding is currently generating about 0.31 per unit of volatility. If you would invest 6,240 in Fubon Financial Holding on August 30, 2024 and sell it today you would earn a total of 40.00 from holding Fubon Financial Holding or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mercuries Associates Holding vs. Fubon Financial Holding
Performance |
| Timeline |
| Mercuries Associates |
| Fubon Financial Holding |
Mercuries Associates and Fubon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercuries Associates and Fubon Financial
The main advantage of trading using opposite Mercuries Associates and Fubon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercuries Associates 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.| Mercuries Associates vs. Far Eastern Department | Mercuries Associates vs. Taiwan Tea Corp | Mercuries Associates vs. Test Rite International | Mercuries Associates vs. Ruentex Industries |
| Fubon Financial vs. Far EasTone Telecommunications | Fubon Financial vs. Syscom Computer Engineering | Fubon Financial vs. Emerging Display Technologies | Fubon Financial vs. Taiwan Chinsan Electronic |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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