Correlation Between Taiwan Weighted and Fubon SSE180
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and Fubon SSE180 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 Weighted and Fubon SSE180 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and Fubon SSE180 Leveraged, you can compare the effects of market volatilities on Taiwan Weighted and Fubon SSE180 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 Weighted with a short position of Fubon SSE180. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and Fubon SSE180.
Diversification Opportunities for Taiwan Weighted and Fubon SSE180
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Taiwan and Fubon is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and Fubon SSE180 Leveraged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon SSE180 Leveraged and Taiwan Weighted 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 Weighted are associated (or correlated) with Fubon SSE180. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon SSE180 Leveraged has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and Fubon SSE180 go up and down completely randomly.
Pair Corralation between Taiwan Weighted and Fubon SSE180
Assuming the 90 days trading horizon Taiwan Weighted is expected to generate 0.44 times more return on investment than Fubon SSE180. However, Taiwan Weighted is 2.27 times less risky than Fubon SSE180. It trades about 0.09 of its potential returns per unit of risk. Fubon SSE180 Leveraged is currently generating about 0.01 per unit of risk. If you would invest 1,452,296 in Taiwan Weighted on September 3, 2024 and sell it today you would earn a total of 773,954 from holding Taiwan Weighted or generate 53.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.75% |
| Values | Daily Returns |
Taiwan Weighted vs. Fubon SSE180 Leveraged
Performance |
| Timeline |
Taiwan Weighted and Fubon SSE180 Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Fubon SSE180 Leveraged
Pair trading matchups for Fubon SSE180
Pair Trading with Taiwan Weighted and Fubon SSE180
The main advantage of trading using opposite Taiwan Weighted and Fubon SSE180 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, Fubon SSE180 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 SSE180 will offset losses from the drop in Fubon SSE180's long position.| Taiwan Weighted vs. Min Aik Technology | Taiwan Weighted vs. CHINA DEVELOPMENT FINANCIAL | Taiwan Weighted vs. Mega Financial Holding | Taiwan Weighted vs. Taishin Financial Holding |
| Fubon SSE180 vs. Cathay Taiwan 5G | Fubon SSE180 vs. Ruentex Development Co | Fubon SSE180 vs. Symtek Automation Asia | Fubon SSE180 vs. CTCI Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |