Correlation Between Fubon 1 and Capital Nasdaq

Can any of the company-specific risk be diversified away by investing in both Fubon 1 and Capital 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 Fubon 1 and Capital Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fubon 1 3 Years and Capital Nasdaq Biotechnology, you can compare the effects of market volatilities on Fubon 1 and Capital 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 Fubon 1 with a short position of Capital Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon 1 and Capital Nasdaq.

Diversification Opportunities for Fubon 1 and Capital Nasdaq

0.27

Correlation Coefficient

Fubon 1  Capital Nasdaq

Modest diversification

The 3 months correlation between Fubon and Capital is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Fubon 1 3 Years and Capital Nasdaq Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Nasdaq Biote and Fubon 1 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 1 3 Years are associated (or correlated) with Capital Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Nasdaq Biote has no effect on the direction of Fubon 1 i.e., Fubon 1 and Capital Nasdaq go up and down completely randomly.

Pair Corralation between Fubon 1 and Capital Nasdaq

Assuming the 90 days trading horizon Fubon 1 3 Years is expected to generate 0.24 times more return on investment than Capital Nasdaq. However, Fubon 1 3 Years is 4.23 times less risky than Capital Nasdaq. It trades about 0.17 of its potential returns per unit of risk. Capital Nasdaq Biotechnology is currently generating about 0.01 per unit of risk. If you would invest  4,221  in Fubon 1 3 Years on December 29, 2024 and sell it today you would earn a total of  115.00  from holding Fubon 1 3 Years or generate 2.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.25%
Values	Daily Returns

Fubon 1 3 Years  vs.  Capital Nasdaq Biotechnology

Fubon 1 3

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fubon 1 3 Years are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Fubon 1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Capital Nasdaq Biote

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Capital Nasdaq Biotechnology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Capital Nasdaq 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 1 and Capital Nasdaq

The main advantage of trading using opposite Fubon 1 and Capital Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon 1 position performs unexpectedly, Capital 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 Capital Nasdaq will offset losses from the drop in Capital Nasdaq's long position.

The idea behind Fubon 1 3 Years and Capital Nasdaq Biotechnology 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.