Correlation Between Fubon MSCI and China Times
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and China Times 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 China Times 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 China Times Publishing, you can compare the effects of market volatilities on Fubon MSCI and China Times 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 China Times. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and China Times.
Diversification Opportunities for Fubon MSCI and China Times
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fubon and China is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and China Times Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Times Publishing 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 China Times. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Times Publishing has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and China Times go up and down completely randomly.
Pair Corralation between Fubon MSCI and China Times
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 0.38 times more return on investment than China Times. However, Fubon MSCI Taiwan is 2.67 times less risky than China Times. It trades about -0.05 of its potential returns per unit of risk. China Times Publishing is currently generating about -0.02 per unit of risk. If you would invest 14,550 in Fubon MSCI Taiwan on September 10, 2024 and sell it today you would lose (185.00) from holding Fubon MSCI Taiwan or give up 1.27% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Fubon MSCI Taiwan vs. China Times Publishing
Performance |
Timeline |
Fubon MSCI Taiwan |
China Times Publishing |
Fubon MSCI and China Times Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fubon MSCI and China Times
The main advantage of trading using opposite Fubon MSCI and China Times positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, China Times 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 China Times will offset losses from the drop in China Times' 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 |
China Times vs. Chinese Gamer International | China Times vs. Pacific Hospital Supply | China Times vs. Cowealth Medical Holding | China Times vs. Tehmag Foods |
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
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |