Correlation Between Yuanta Daily and Fubon TWSE
Can any of the company-specific risk be diversified away by investing in both Yuanta Daily and Fubon TWSE 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 Yuanta Daily and Fubon TWSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuanta Daily CSI and Fubon TWSE Corporate, you can compare the effects of market volatilities on Yuanta Daily and Fubon TWSE 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 Yuanta Daily with a short position of Fubon TWSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Daily and Fubon TWSE.
Diversification Opportunities for Yuanta Daily and Fubon TWSE
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yuanta and Fubon is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Daily CSI and Fubon TWSE Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon TWSE Corporate and Yuanta Daily 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 Yuanta Daily CSI are associated (or correlated) with Fubon TWSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon TWSE Corporate has no effect on the direction of Yuanta Daily i.e., Yuanta Daily and Fubon TWSE go up and down completely randomly.
Pair Corralation between Yuanta Daily and Fubon TWSE
Assuming the 90 days trading horizon Yuanta Daily CSI is expected to generate 2.32 times more return on investment than Fubon TWSE. However, Yuanta Daily is 2.32 times more volatile than Fubon TWSE Corporate. It trades about 0.09 of its potential returns per unit of risk. Fubon TWSE Corporate is currently generating about -0.13 per unit of risk. If you would invest 1,492 in Yuanta Daily CSI on December 5, 2024 and sell it today you would earn a total of 51.00 from holding Yuanta Daily CSI or generate 3.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Yuanta Daily CSI vs. Fubon TWSE Corporate
Performance |
Timeline |
Yuanta Daily CSI |
Fubon TWSE Corporate |
Yuanta Daily and Fubon TWSE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Yuanta Daily and Fubon TWSE
The main advantage of trading using opposite Yuanta Daily and Fubon TWSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Daily position performs unexpectedly, Fubon TWSE 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 TWSE will offset losses from the drop in Fubon TWSE's long position.Yuanta Daily vs. Yuanta Daily SP | Yuanta Daily vs. Yuanta Securities Investment | Yuanta Daily vs. Yuanta SP GSCI | Yuanta Daily vs. Yuanta Global NexGen |
Fubon TWSE vs. Fubon Hang Seng | Fubon TWSE vs. Fubon SP Preferred | Fubon TWSE vs. Fubon NASDAQ 100 1X | Fubon TWSE vs. Fubon Dow Jones |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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