Correlation Between Emerging Display and Fubon Financial
Can any of the company-specific risk be diversified away by investing in both Emerging Display 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 Emerging Display and Fubon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Display Technologies and Fubon Financial Holding, you can compare the effects of market volatilities on Emerging Display 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 Emerging Display with a short position of Fubon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Display and Fubon Financial.
Diversification Opportunities for Emerging Display and Fubon Financial
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Emerging and Fubon is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Display Technologies 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 Emerging Display 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 Emerging Display Technologies 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 Emerging Display i.e., Emerging Display and Fubon Financial go up and down completely randomly.
Pair Corralation between Emerging Display and Fubon Financial
Assuming the 90 days trading horizon Emerging Display Technologies is expected to generate 8.33 times more return on investment than Fubon Financial. However, Emerging Display is 8.33 times more volatile than Fubon Financial Holding. It trades about 0.53 of its potential returns per unit of risk. Fubon Financial Holding is currently generating about 0.24 per unit of risk. If you would invest 2,635 in Emerging Display Technologies on November 28, 2024 and sell it today you would earn a total of 250.00 from holding Emerging Display Technologies or generate 9.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Emerging Display Technologies vs. Fubon Financial Holding
Performance |
| Timeline |
| Emerging Display Tec |
| Fubon Financial Holding |
Emerging Display and Fubon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Display and Fubon Financial
The main advantage of trading using opposite Emerging Display and Fubon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Display 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.| Emerging Display vs. Thye Ming Industrial | Emerging Display vs. Loop Telecommunication International | Emerging Display vs. Chernan Metal Industrial | Emerging Display vs. Tsang Yow Industrial |
| Fubon Financial vs. Kinsus Interconnect Technology | Fubon Financial vs. Genovate Biotechnology Co | Fubon Financial vs. CHINA DEVELOPMENT FINANCIAL | Fubon Financial vs. Sitronix Technology Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |