Correlation Between Fu Burg and Fubon Taiwan
Can any of the company-specific risk be diversified away by investing in both Fu Burg 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 Fu Burg and Fubon Taiwan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fu Burg Industrial and Fubon Taiwan Technology, you can compare the effects of market volatilities on Fu Burg 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 Fu Burg with a short position of Fubon Taiwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fu Burg and Fubon Taiwan.
Diversification Opportunities for Fu Burg and Fubon Taiwan
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between 8929 and Fubon is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Fu Burg Industrial 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 Fu Burg 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 Fu Burg Industrial 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 Fu Burg i.e., Fu Burg and Fubon Taiwan go up and down completely randomly.
Pair Corralation between Fu Burg and Fubon Taiwan
Assuming the 90 days trading horizon Fu Burg Industrial is expected to generate 3.27 times more return on investment than Fubon Taiwan. However, Fu Burg is 3.27 times more volatile than Fubon Taiwan Technology. It trades about 0.1 of its potential returns per unit of risk. Fubon Taiwan Technology is currently generating about 0.11 per unit of risk. If you would invest 2,230 in Fu Burg Industrial on September 12, 2024 and sell it today you would earn a total of 525.00 from holding Fu Burg Industrial or generate 23.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Fu Burg Industrial vs. Fubon Taiwan Technology
Performance |
| Timeline |
| Fu Burg Industrial |
| Fubon Taiwan Technology |
Fu Burg and Fubon Taiwan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fu Burg and Fubon Taiwan
The main advantage of trading using opposite Fu Burg and Fubon Taiwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fu Burg 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.| Fu Burg vs. Voltronic Power Technology | Fu Burg vs. Promise Technology | Fu Burg vs. Gigastorage Corp | Fu Burg vs. United Radiant Technology |
| Fubon Taiwan vs. Iron Force Industrial | Fubon Taiwan vs. Adata Technology Co | Fubon Taiwan vs. Mayer Steel Pipe | Fubon Taiwan vs. Evergreen International Storage |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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