Correlation Between Fubon MSCI and ThinTech Materials
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and ThinTech Materials 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 ThinTech Materials 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 ThinTech Materials Technology, you can compare the effects of market volatilities on Fubon MSCI and ThinTech Materials 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 ThinTech Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and ThinTech Materials.
Diversification Opportunities for Fubon MSCI and ThinTech Materials
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and ThinTech is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and ThinTech Materials Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ThinTech Materials 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 ThinTech Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ThinTech Materials has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and ThinTech Materials go up and down completely randomly.
Pair Corralation between Fubon MSCI and ThinTech Materials
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 0.46 times more return on investment than ThinTech Materials. However, Fubon MSCI Taiwan is 2.17 times less risky than ThinTech Materials. It trades about 0.13 of its potential returns per unit of risk. ThinTech Materials Technology is currently generating about -0.14 per unit of risk. If you would invest 13,090 in Fubon MSCI Taiwan on September 18, 2024 and sell it today you would earn a total of 1,295 from holding Fubon MSCI Taiwan or generate 9.89% 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. ThinTech Materials Technology
Performance |
Timeline |
Fubon MSCI Taiwan |
ThinTech Materials |
Fubon MSCI and ThinTech Materials Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fubon MSCI and ThinTech Materials
The main advantage of trading using opposite Fubon MSCI and ThinTech Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, ThinTech Materials 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 ThinTech Materials will offset losses from the drop in ThinTech Materials' 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 |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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