Correlation Between Leatec Fine and Fubon SSE180
Can any of the company-specific risk be diversified away by investing in both Leatec Fine and Fubon SSE180 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 Leatec Fine and Fubon SSE180 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leatec Fine Ceramics and Fubon SSE180 Leveraged, you can compare the effects of market volatilities on Leatec Fine and Fubon SSE180 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 Leatec Fine with a short position of Fubon SSE180. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leatec Fine and Fubon SSE180.
Diversification Opportunities for Leatec Fine and Fubon SSE180
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Leatec and Fubon is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Leatec Fine Ceramics and Fubon SSE180 Leveraged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon SSE180 Leveraged and Leatec Fine 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 Leatec Fine Ceramics are associated (or correlated) with Fubon SSE180. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon SSE180 Leveraged has no effect on the direction of Leatec Fine i.e., Leatec Fine and Fubon SSE180 go up and down completely randomly.
Pair Corralation between Leatec Fine and Fubon SSE180
Assuming the 90 days trading horizon Leatec Fine is expected to generate 19.34 times less return on investment than Fubon SSE180. In addition to that, Leatec Fine is 1.21 times more volatile than Fubon SSE180 Leveraged. It trades about 0.01 of its total potential returns per unit of risk. Fubon SSE180 Leveraged is currently generating about 0.23 per unit of volatility. If you would invest 3,673 in Fubon SSE180 Leveraged on December 1, 2024 and sell it today you would earn a total of 291.00 from holding Fubon SSE180 Leveraged or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leatec Fine Ceramics vs. Fubon SSE180 Leveraged
Performance |
| Timeline |
| Leatec Fine Ceramics |
| Fubon SSE180 Leveraged |
Leatec Fine and Fubon SSE180 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leatec Fine and Fubon SSE180
The main advantage of trading using opposite Leatec Fine and Fubon SSE180 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leatec Fine position performs unexpectedly, Fubon SSE180 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 SSE180 will offset losses from the drop in Fubon SSE180's long position.| Leatec Fine vs. Emerging Display Technologies | Leatec Fine vs. AVer Information | Leatec Fine vs. Jetway Information Co | Leatec Fine vs. Mercuries Data Systems |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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