Correlation Between Fubon MSCI and Fubon NIFTY
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Fubon NIFTY 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 Fubon MSCI and Fubon NIFTY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fubon MSCI Taiwan and Fubon NIFTY, you can compare the effects of market volatilities on Fubon MSCI and Fubon NIFTY 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 Fubon MSCI with a short position of Fubon NIFTY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Fubon NIFTY.
Diversification Opportunities for Fubon MSCI and Fubon NIFTY
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and Fubon is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Fubon NIFTY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon NIFTY and Fubon MSCI 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 Fubon MSCI Taiwan are associated (or correlated) with Fubon NIFTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon NIFTY has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Fubon NIFTY go up and down completely randomly.
Pair Corralation between Fubon MSCI and Fubon NIFTY
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 1.94 times more return on investment than Fubon NIFTY. However, Fubon MSCI is 1.94 times more volatile than Fubon NIFTY. It trades about -0.12 of its potential returns per unit of risk. Fubon NIFTY is currently generating about -0.38 per unit of risk. If you would invest 14,800 in Fubon MSCI Taiwan on December 5, 2024 and sell it today you would lose (825.00) from holding Fubon MSCI Taiwan or give up 5.57% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Fubon MSCI Taiwan vs. Fubon NIFTY
Performance |
Timeline |
Fubon MSCI Taiwan |
Fubon NIFTY |
Fubon MSCI and Fubon NIFTY Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fubon MSCI and Fubon NIFTY
The main advantage of trading using opposite Fubon MSCI and Fubon NIFTY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Fubon NIFTY 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 NIFTY will offset losses from the drop in Fubon NIFTY's long position.Fubon MSCI vs. Fubon Hang Seng | Fubon MSCI vs. Fubon SP Preferred | Fubon MSCI vs. Fubon NASDAQ 100 1X | Fubon MSCI vs. Fubon TWSE Corporate |
Fubon NIFTY vs. Fubon Hang Seng | Fubon NIFTY vs. Fubon SP Preferred | Fubon NIFTY vs. Fubon NASDAQ 100 1X | Fubon NIFTY vs. Fubon TWSE Corporate |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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