Correlation Between Fubon SP and Fubon NIFTY
Can any of the company-specific risk be diversified away by investing in both Fubon SP 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 SP 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 SP Preferred and Fubon NIFTY, you can compare the effects of market volatilities on Fubon SP 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 SP with a short position of Fubon NIFTY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon SP and Fubon NIFTY.
Diversification Opportunities for Fubon SP and Fubon NIFTY
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fubon and Fubon is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Fubon SP Preferred and Fubon NIFTY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon NIFTY and Fubon SP 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 SP Preferred 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 SP i.e., Fubon SP and Fubon NIFTY go up and down completely randomly.
Pair Corralation between Fubon SP and Fubon NIFTY
Assuming the 90 days trading horizon Fubon SP Preferred is expected to generate 0.65 times more return on investment than Fubon NIFTY. However, Fubon SP Preferred is 1.54 times less risky than Fubon NIFTY. It trades about 0.0 of its potential returns per unit of risk. Fubon NIFTY is currently generating about -0.13 per unit of risk. If you would invest 1,612 in Fubon SP Preferred on December 5, 2024 and sell it today you would lose (5.00) from holding Fubon SP Preferred or give up 0.31% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fubon SP Preferred vs. Fubon NIFTY
Performance |
Timeline |
Fubon SP Preferred |
Fubon NIFTY |
Fubon SP and Fubon NIFTY Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fubon SP and Fubon NIFTY
The main advantage of trading using opposite Fubon SP and Fubon NIFTY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon SP 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.Fubon SP vs. Fubon Hang Seng | Fubon SP vs. Fubon NASDAQ 100 1X | Fubon SP vs. Fubon TWSE Corporate | Fubon SP vs. Fubon Dow Jones |
Fubon NIFTY vs. Fubon Hang Seng | Fubon NIFTY vs. Fubon SP Preferred | Fubon NIFTY vs. Fubon NASDAQ 100 1X | Fubon NIFTY vs. Fubon TWSE Corporate |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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