Correlation Between Chinese Gamer and Fubon MSCI
Can any of the company-specific risk be diversified away by investing in both Chinese Gamer and Fubon MSCI 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 Chinese Gamer and Fubon MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chinese Gamer International and Fubon MSCI Taiwan, you can compare the effects of market volatilities on Chinese Gamer and Fubon MSCI 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 Chinese Gamer with a short position of Fubon MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Gamer and Fubon MSCI.
Diversification Opportunities for Chinese Gamer and Fubon MSCI
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chinese and Fubon is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Gamer International and Fubon MSCI Taiwan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon MSCI Taiwan and Chinese Gamer 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 Chinese Gamer International are associated (or correlated) with Fubon MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon MSCI Taiwan has no effect on the direction of Chinese Gamer i.e., Chinese Gamer and Fubon MSCI go up and down completely randomly.
Pair Corralation between Chinese Gamer and Fubon MSCI
Assuming the 90 days trading horizon Chinese Gamer International is expected to under-perform the Fubon MSCI. In addition to that, Chinese Gamer is 1.2 times more volatile than Fubon MSCI Taiwan. It trades about -0.04 of its total potential returns per unit of risk. Fubon MSCI Taiwan is currently generating about 0.07 per unit of volatility. If you would invest 12,390 in Fubon MSCI Taiwan on August 28, 2024 and sell it today you would earn a total of 1,790 from holding Fubon MSCI Taiwan or generate 14.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chinese Gamer International vs. Fubon MSCI Taiwan
Performance |
| Timeline |
| Chinese Gamer Intern |
| Fubon MSCI Taiwan |
Chinese Gamer and Fubon MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Gamer and Fubon MSCI
The main advantage of trading using opposite Chinese Gamer and Fubon MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Gamer position performs unexpectedly, Fubon MSCI 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 MSCI will offset losses from the drop in Fubon MSCI's long position.| Chinese Gamer vs. Ambassador Hotel | Chinese Gamer vs. Wah Hong Industrial | Chinese Gamer vs. Fu Burg Industrial | Chinese Gamer vs. Chain Chon Industrial |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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