Correlation Between Healthconn Corp and Fubon Financial
Can any of the company-specific risk be diversified away by investing in both Healthconn Corp 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 Healthconn Corp and Fubon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthconn Corp and Fubon Financial Holding, you can compare the effects of market volatilities on Healthconn Corp 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 Healthconn Corp with a short position of Fubon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthconn Corp and Fubon Financial.
Diversification Opportunities for Healthconn Corp and Fubon Financial
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Healthconn and Fubon is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Healthconn Corp 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 Healthconn Corp 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 Healthconn Corp 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 Healthconn Corp i.e., Healthconn Corp and Fubon Financial go up and down completely randomly.
Pair Corralation between Healthconn Corp and Fubon Financial
Assuming the 90 days trading horizon Healthconn Corp is expected to under-perform the Fubon Financial. In addition to that, Healthconn Corp is 19.29 times more volatile than Fubon Financial Holding. It trades about -0.11 of its total potential returns per unit of risk. Fubon Financial Holding is currently generating about 0.32 per unit of volatility. If you would invest 6,200 in Fubon Financial Holding on September 3, 2024 and sell it today you would earn a total of 80.00 from holding Fubon Financial Holding or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Healthconn Corp vs. Fubon Financial Holding
Performance |
| Timeline |
| Healthconn Corp |
| Fubon Financial Holding |
Healthconn Corp and Fubon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthconn Corp and Fubon Financial
The main advantage of trading using opposite Healthconn Corp and Fubon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthconn Corp 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.| Healthconn Corp vs. YuantaP shares Taiwan Electronics | Healthconn Corp vs. YuantaP shares Taiwan Top | Healthconn Corp vs. Fubon MSCI Taiwan | Healthconn Corp vs. YuantaP shares Taiwan Mid Cap |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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