Correlation Between Fubon MSCI and Fubon FTSE
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Fubon FTSE 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 FTSE 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 FTSE Vietnam, you can compare the effects of market volatilities on Fubon MSCI and Fubon FTSE 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 FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Fubon FTSE.
Diversification Opportunities for Fubon MSCI and Fubon FTSE
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and Fubon is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Fubon FTSE Vietnam in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon FTSE Vietnam 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 FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon FTSE Vietnam has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Fubon FTSE go up and down completely randomly.
Pair Corralation between Fubon MSCI and Fubon FTSE
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 1.38 times more return on investment than Fubon FTSE. However, Fubon MSCI is 1.38 times more volatile than Fubon FTSE Vietnam. It trades about 0.12 of its potential returns per unit of risk. Fubon FTSE Vietnam is currently generating about -0.03 per unit of risk. If you would invest 13,185 in Fubon MSCI Taiwan on September 12, 2024 and sell it today you would earn a total of 1,150 from holding Fubon MSCI Taiwan or generate 8.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Fubon MSCI Taiwan vs. Fubon FTSE Vietnam
Performance |
Timeline |
Fubon MSCI Taiwan |
Fubon FTSE Vietnam |
Fubon MSCI and Fubon FTSE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fubon MSCI and Fubon FTSE
The main advantage of trading using opposite Fubon MSCI and Fubon FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Fubon FTSE 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 FTSE will offset losses from the drop in Fubon FTSE's long position.Fubon MSCI vs. YuantaP shares Taiwan Top | Fubon MSCI vs. Yuanta Daily Taiwan | Fubon MSCI vs. Cathay Taiwan 5G | Fubon MSCI vs. Yuanta Daily CSI |
Fubon FTSE vs. YuantaP shares Taiwan Top | Fubon FTSE vs. Yuanta Daily Taiwan | Fubon FTSE vs. Cathay Taiwan 5G | Fubon FTSE vs. Yuanta Daily CSI |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
Global Correlations Find global opportunities by holding instruments from different markets | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |