Correlation Between Fubon NASDAQ and Fubon NIFTY

Can any of the company-specific risk be diversified away by investing in both Fubon NASDAQ 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 NASDAQ 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 NASDAQ 100 1X and Fubon NIFTY, you can compare the effects of market volatilities on Fubon NASDAQ 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 NASDAQ with a short position of Fubon NIFTY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon NASDAQ and Fubon NIFTY.

Diversification Opportunities for Fubon NASDAQ and Fubon NIFTY

0.55

Correlation Coefficient

Fubon NASDAQ  Fubon NIFTY

Very weak diversification

The 3 months correlation between Fubon and Fubon is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Fubon NASDAQ 100 1X and Fubon NIFTY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon NIFTY and Fubon NASDAQ 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 NASDAQ 100 1X 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 NASDAQ i.e., Fubon NASDAQ and Fubon NIFTY go up and down completely randomly.

Pair Corralation between Fubon NASDAQ and Fubon NIFTY

Assuming the 90 days trading horizon Fubon NASDAQ 100 1X is expected to under-perform the Fubon NIFTY. In addition to that, Fubon NASDAQ is 1.52 times more volatile than Fubon NIFTY. It trades about -0.12 of its total potential returns per unit of risk. Fubon NIFTY is currently generating about 0.08 per unit of volatility. If you would invest  2,995  in Fubon NIFTY on September 18, 2024 and sell it today you would earn a total of  902.00  from holding Fubon NIFTY or generate 30.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Fubon NASDAQ 100 1X  vs.  Fubon NIFTY

Fubon NASDAQ 100

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fubon NASDAQ 100 1X has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Fubon NIFTY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fubon NIFTY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fubon NIFTY is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Fubon NASDAQ and Fubon NIFTY

The main advantage of trading using opposite Fubon NASDAQ and Fubon NIFTY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon NASDAQ 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.

The idea behind Fubon NASDAQ 100 1X and Fubon NIFTY pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.