Correlation Between X Legend and Fubon Financial
Can any of the company-specific risk be diversified away by investing in both X Legend 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 X Legend and Fubon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X Legend Entertainment Co and Fubon Financial Holding, you can compare the effects of market volatilities on X Legend 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 X Legend with a short position of Fubon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Legend and Fubon Financial.
Diversification Opportunities for X Legend and Fubon Financial
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 4994 and Fubon is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding X Legend Entertainment Co 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 X Legend 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 X Legend Entertainment Co 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 X Legend i.e., X Legend and Fubon Financial go up and down completely randomly.
Pair Corralation between X Legend and Fubon Financial
Assuming the 90 days trading horizon X Legend Entertainment Co is expected to generate 0.97 times more return on investment than Fubon Financial. However, X Legend Entertainment Co is 1.03 times less risky than Fubon Financial. It trades about 0.43 of its potential returns per unit of risk. Fubon Financial Holding is currently generating about -0.09 per unit of risk. If you would invest 10,050 in X Legend Entertainment Co on August 28, 2024 and sell it today you would earn a total of 950.00 from holding X Legend Entertainment Co or generate 9.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X Legend Entertainment Co vs. Fubon Financial Holding
Performance |
| Timeline |
| X Legend Entertainment |
| Fubon Financial Holding |
X Legend and Fubon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Legend and Fubon Financial
The main advantage of trading using opposite X Legend and Fubon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Legend 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.| X Legend vs. Chunghwa Telecom Co | X Legend vs. CTBC Financial Holding | X Legend vs. Fubon Financial Holding | X Legend vs. President Chain Store |
| Fubon Financial vs. Tait Marketing Distribution | Fubon Financial vs. Cameo Communications | Fubon Financial vs. Ligitek Electronics Co | Fubon Financial vs. Excellence Optoelectronic |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |