Correlation Between Fuh Hwa and Fuh Hwa
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By analyzing existing cross correlation between Fuh Hwa 20 and Fuh Hwa Taiwan, you can compare the effects of market volatilities on Fuh Hwa and Fuh Hwa 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 Fuh Hwa with a short position of Fuh Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuh Hwa and Fuh Hwa.
Diversification Opportunities for Fuh Hwa and Fuh Hwa
Pay attention - limited upside
The 3 months correlation between Fuh and Fuh is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fuh Hwa 20 and Fuh Hwa Taiwan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuh Hwa Taiwan and Fuh Hwa 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 Fuh Hwa 20 are associated (or correlated) with Fuh Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuh Hwa Taiwan has no effect on the direction of Fuh Hwa i.e., Fuh Hwa and Fuh Hwa go up and down completely randomly.
Pair Corralation between Fuh Hwa and Fuh Hwa
Assuming the 90 days trading horizon Fuh Hwa 20 is expected to under-perform the Fuh Hwa. In addition to that, Fuh Hwa is 1.04 times more volatile than Fuh Hwa Taiwan. It trades about -0.38 of its total potential returns per unit of risk. Fuh Hwa Taiwan is currently generating about 0.09 per unit of volatility. If you would invest 1,793 in Fuh Hwa Taiwan on October 11, 2024 and sell it today you would earn a total of 23.00 from holding Fuh Hwa Taiwan or generate 1.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Fuh Hwa 20 vs. Fuh Hwa Taiwan
Performance |
Timeline |
Fuh Hwa 20 |
Fuh Hwa Taiwan |
Fuh Hwa and Fuh Hwa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fuh Hwa and Fuh Hwa
The main advantage of trading using opposite Fuh Hwa and Fuh Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuh Hwa position performs unexpectedly, Fuh Hwa 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 Fuh Hwa will offset losses from the drop in Fuh Hwa's long position.The idea behind Fuh Hwa 20 and Fuh Hwa Taiwan 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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