Correlation Between Tait Marketing and Fubon Financial
Can any of the company-specific risk be diversified away by investing in both Tait Marketing 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 Tait Marketing and Fubon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tait Marketing Distribution and Fubon Financial Holding, you can compare the effects of market volatilities on Tait Marketing 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 Tait Marketing with a short position of Fubon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tait Marketing and Fubon Financial.
Diversification Opportunities for Tait Marketing and Fubon Financial
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tait and Fubon is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Tait Marketing Distribution 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 Tait Marketing 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 Tait Marketing Distribution 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 Tait Marketing i.e., Tait Marketing and Fubon Financial go up and down completely randomly.
Pair Corralation between Tait Marketing and Fubon Financial
Assuming the 90 days trading horizon Tait Marketing Distribution is expected to generate 0.48 times more return on investment than Fubon Financial. However, Tait Marketing Distribution is 2.09 times less risky than Fubon Financial. It trades about 0.15 of its potential returns per unit of risk. Fubon Financial Holding is currently generating about -0.13 per unit of risk. If you would invest 3,875 in Tait Marketing Distribution on August 31, 2024 and sell it today you would earn a total of 65.00 from holding Tait Marketing Distribution or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tait Marketing Distribution vs. Fubon Financial Holding
Performance |
| Timeline |
| Tait Marketing Distr |
| Fubon Financial Holding |
Tait Marketing and Fubon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tait Marketing and Fubon Financial
The main advantage of trading using opposite Tait Marketing and Fubon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tait Marketing 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.| Tait Marketing vs. YuantaP shares Taiwan Top | Tait Marketing vs. YuantaP shares Taiwan Electronics | Tait Marketing vs. YuantaP shares Taiwan Mid Cap | Tait Marketing vs. Fubon MSCI Taiwan |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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