Correlation Between New Advanced and Fubon Taiwan
Can any of the company-specific risk be diversified away by investing in both New Advanced and Fubon Taiwan 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 New Advanced and Fubon Taiwan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Advanced Electronics and Fubon Taiwan Technology, you can compare the effects of market volatilities on New Advanced and Fubon Taiwan 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 New Advanced with a short position of Fubon Taiwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Advanced and Fubon Taiwan.
Diversification Opportunities for New Advanced and Fubon Taiwan
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and Fubon is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding New Advanced Electronics and Fubon Taiwan Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon Taiwan Technology and New Advanced 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 New Advanced Electronics are associated (or correlated) with Fubon Taiwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon Taiwan Technology has no effect on the direction of New Advanced i.e., New Advanced and Fubon Taiwan go up and down completely randomly.
Pair Corralation between New Advanced and Fubon Taiwan
Assuming the 90 days trading horizon New Advanced Electronics is expected to under-perform the Fubon Taiwan. In addition to that, New Advanced is 1.61 times more volatile than Fubon Taiwan Technology. It trades about -0.31 of its total potential returns per unit of risk. Fubon Taiwan Technology is currently generating about -0.1 per unit of volatility. If you would invest 18,915 in Fubon Taiwan Technology on September 1, 2024 and sell it today you would lose (525.00) from holding Fubon Taiwan Technology or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
New Advanced Electronics vs. Fubon Taiwan Technology
Performance |
| Timeline |
| New Advanced Electronics |
| Fubon Taiwan Technology |
New Advanced and Fubon Taiwan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Advanced and Fubon Taiwan
The main advantage of trading using opposite New Advanced and Fubon Taiwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Advanced position performs unexpectedly, Fubon Taiwan 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 Taiwan will offset losses from the drop in Fubon Taiwan's long position.| New Advanced vs. STL Technology Co | New Advanced vs. Univacco Technology | New Advanced vs. CHC Healthcare Group | New Advanced vs. Genovate Biotechnology Co |
| Fubon Taiwan vs. Microelectronics Technology | Fubon Taiwan vs. Univacco Technology | Fubon Taiwan vs. Niko Semiconductor Co | Fubon Taiwan vs. Taiwan Semiconductor Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |