Correlation Between PChome Online and Fubon Financial
Can any of the company-specific risk be diversified away by investing in both PChome Online 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 PChome Online and Fubon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PChome Online and Fubon Financial Holding, you can compare the effects of market volatilities on PChome Online 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 PChome Online with a short position of Fubon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PChome Online and Fubon Financial.
Diversification Opportunities for PChome Online and Fubon Financial
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PChome and Fubon is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding PChome Online 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 PChome Online 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 PChome Online 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 PChome Online i.e., PChome Online and Fubon Financial go up and down completely randomly.
Pair Corralation between PChome Online and Fubon Financial
Assuming the 90 days trading horizon PChome Online is expected to generate 5.79 times more return on investment than Fubon Financial. However, PChome Online is 5.79 times more volatile than Fubon Financial Holding. It trades about 0.22 of its potential returns per unit of risk. Fubon Financial Holding is currently generating about -0.08 per unit of risk. If you would invest 4,215 in PChome Online on August 29, 2024 and sell it today you would earn a total of 1,205 from holding PChome Online or generate 28.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PChome Online vs. Fubon Financial Holding
Performance |
| Timeline |
| PChome Online |
| Fubon Financial Holding |
PChome Online and Fubon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PChome Online and Fubon Financial
The main advantage of trading using opposite PChome Online and Fubon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PChome Online 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.| PChome Online vs. momo Inc | PChome Online vs. President Chain Store | PChome Online vs. Uni President Enterprises Corp | PChome Online vs. Taiwan FamilyMart Co |
| Fubon Financial vs. Taiwan Secom Co | Fubon Financial vs. TTET Union Corp | Fubon Financial vs. China Steel Chemical | Fubon Financial vs. Taiwan Shin Kong |
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.
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