Correlation Between Capital Taiex and Fubon NASDAQ

Can any of the company-specific risk be diversified away by investing in both Capital Taiex and Fubon NASDAQ 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 Capital Taiex and Fubon NASDAQ into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Capital Taiex Daily and Fubon NASDAQ 100 Index, you can compare the effects of market volatilities on Capital Taiex and Fubon NASDAQ 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 Capital Taiex with a short position of Fubon NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Taiex and Fubon NASDAQ.

Diversification Opportunities for Capital Taiex and Fubon NASDAQ

0.0

Correlation Coefficient

Capital Taiex  Fubon NASDAQ

Pay attention - limited upside

The 3 months correlation between Capital and Fubon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Capital Taiex Daily and Fubon NASDAQ 100 Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon NASDAQ 100 and Capital Taiex 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 Capital Taiex Daily are associated (or correlated) with Fubon NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon NASDAQ 100 has no effect on the direction of Capital Taiex i.e., Capital Taiex and Fubon NASDAQ go up and down completely randomly.

Pair Corralation between Capital Taiex and Fubon NASDAQ

If you would invest  8,700  in Fubon NASDAQ 100 Index on September 16, 2024 and sell it today you would earn a total of  380.00  from holding Fubon NASDAQ 100 Index or generate 4.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Capital Taiex Daily  vs.  Fubon NASDAQ 100 Index

Capital Taiex Daily

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capital Taiex Daily has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Capital Taiex is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fubon NASDAQ 100

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fubon NASDAQ 100 Index are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Fubon NASDAQ may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Capital Taiex and Fubon NASDAQ

The main advantage of trading using opposite Capital Taiex and Fubon NASDAQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Taiex position performs unexpectedly, Fubon NASDAQ 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 NASDAQ will offset losses from the drop in Fubon NASDAQ's long position.

The idea behind Capital Taiex Daily and Fubon NASDAQ 100 Index 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.