Correlation Between Andes Technology and Fubon Taiwan
Can any of the company-specific risk be diversified away by investing in both Andes Technology 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 Andes Technology and Fubon Taiwan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Andes Technology Corp and Fubon Taiwan Technology, you can compare the effects of market volatilities on Andes Technology 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 Andes Technology with a short position of Fubon Taiwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andes Technology and Fubon Taiwan.
Diversification Opportunities for Andes Technology and Fubon Taiwan
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Andes and Fubon is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Andes Technology Corp 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 Andes Technology 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 Andes Technology Corp 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 Andes Technology i.e., Andes Technology and Fubon Taiwan go up and down completely randomly.
Pair Corralation between Andes Technology and Fubon Taiwan
Assuming the 90 days trading horizon Andes Technology Corp is expected to under-perform the Fubon Taiwan. In addition to that, Andes Technology is 1.39 times more volatile than Fubon Taiwan Technology. It trades about -0.03 of its total potential returns per unit of risk. Fubon Taiwan Technology is currently generating about 0.06 per unit of volatility. If you would invest 16,330 in Fubon Taiwan Technology on September 2, 2024 and sell it today you would earn a total of 2,060 from holding Fubon Taiwan Technology or generate 12.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Andes Technology Corp vs. Fubon Taiwan Technology
Performance |
| Timeline |
| Andes Technology Corp |
| Fubon Taiwan Technology |
Andes Technology and Fubon Taiwan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andes Technology and Fubon Taiwan
The main advantage of trading using opposite Andes Technology and Fubon Taiwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andes Technology 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.| Andes Technology vs. Taiwan Semiconductor Manufacturing | Andes Technology vs. MediaTek | Andes Technology vs. United Microelectronics | Andes Technology vs. Novatek Microelectronics Corp |
| Fubon Taiwan vs. Taiwan Taomee Co | Fubon Taiwan vs. AP Memory Technology | Fubon Taiwan vs. RichWave Technology Corp | Fubon Taiwan vs. Fitipower Integrated Technology |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |