Correlation Between Taiwan Fu and Fu Burg
Can any of the company-specific risk be diversified away by investing in both Taiwan Fu and Fu Burg 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 Taiwan Fu and Fu Burg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Fu Hsing and Fu Burg Industrial, you can compare the effects of market volatilities on Taiwan Fu and Fu Burg 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 Taiwan Fu with a short position of Fu Burg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Fu and Fu Burg.
Diversification Opportunities for Taiwan Fu and Fu Burg
Modest diversification
The 3 months correlation between Taiwan and 8929 is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Fu Hsing and Fu Burg Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fu Burg Industrial and Taiwan Fu 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 Taiwan Fu Hsing are associated (or correlated) with Fu Burg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fu Burg Industrial has no effect on the direction of Taiwan Fu i.e., Taiwan Fu and Fu Burg go up and down completely randomly.
Pair Corralation between Taiwan Fu and Fu Burg
Assuming the 90 days trading horizon Taiwan Fu is expected to generate 1.09 times less return on investment than Fu Burg. But when comparing it to its historical volatility, Taiwan Fu Hsing is 1.64 times less risky than Fu Burg. It trades about 0.04 of its potential returns per unit of risk. Fu Burg Industrial is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,070 in Fu Burg Industrial on October 25, 2024 and sell it today you would earn a total of 355.00 from holding Fu Burg Industrial or generate 17.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Fu Hsing vs. Fu Burg Industrial
Performance |
| Timeline |
| Taiwan Fu Hsing |
| Fu Burg Industrial |
Taiwan Fu and Fu Burg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Fu and Fu Burg
The main advantage of trading using opposite Taiwan Fu and Fu Burg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Fu position performs unexpectedly, Fu Burg 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 Fu Burg will offset losses from the drop in Fu Burg's long position.| Taiwan Fu vs. Taiwan Shin Kong | Taiwan Fu vs. Taiwan Secom Co | Taiwan Fu vs. Pou Chen Corp | Taiwan Fu vs. Taiwan Hon Chuan |
| Fu Burg vs. Chlitina Holding | Fu Burg vs. Taiyen Biotech Co | Fu Burg vs. Nan Liu Enterprise | Fu Burg vs. DRWu Skincare Co |
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 Stocks Directory module to find actively traded stocks across global markets.
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