Correlation Between Energenesis Biomedical and Fubon Financial

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Can any of the company-specific risk be diversified away by investing in both Energenesis Biomedical 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 Energenesis Biomedical and Fubon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energenesis Biomedical Co and Fubon Financial Holding, you can compare the effects of market volatilities on Energenesis Biomedical 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 Energenesis Biomedical with a short position of Fubon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energenesis Biomedical and Fubon Financial.

Diversification Opportunities for Energenesis Biomedical and Fubon Financial

0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between Energenesis and Fubon is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Energenesis Biomedical 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 Energenesis Biomedical 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 Energenesis Biomedical 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 Energenesis Biomedical i.e., Energenesis Biomedical and Fubon Financial go up and down completely randomly.

Pair Corralation between Energenesis Biomedical and Fubon Financial

Assuming the 90 days trading horizon Energenesis Biomedical Co is expected to under-perform the Fubon Financial. In addition to that, Energenesis Biomedical is 1.41 times more volatile than Fubon Financial Holding. It trades about -0.01 of its total potential returns per unit of risk. Fubon Financial Holding is currently generating about 0.11 per unit of volatility. If you would invest  6,080  in Fubon Financial Holding on August 25, 2024 and sell it today you would earn a total of  2,850  from holding Fubon Financial Holding or generate 46.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Energenesis Biomedical Co  vs.  Fubon Financial Holding

 Performance 
       Timeline  
Energenesis Biomedical 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Energenesis Biomedical Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Energenesis Biomedical is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
Fubon Financial Holding 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Fubon Financial Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Fubon Financial is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Energenesis Biomedical and Fubon Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Energenesis Biomedical and Fubon Financial

The main advantage of trading using opposite Energenesis Biomedical and Fubon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energenesis Biomedical 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.
The idea behind Energenesis Biomedical Co and Fubon Financial Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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