Correlation Between Fubon Financial and Silergy Corp

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

By analyzing existing cross correlation between Fubon Financial Holding and Silergy Corp, you can compare the effects of market volatilities on Fubon Financial and Silergy Corp 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 Financial with a short position of Silergy Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Silergy Corp.

Diversification Opportunities for Fubon Financial and Silergy Corp

0.39

Correlation Coefficient

Fubon Financial  Silergy Corp

Weak diversification

The 3 months correlation between Fubon and Silergy is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Silergy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silergy Corp and Fubon Financial 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 Financial Holding are associated (or correlated) with Silergy Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silergy Corp has no effect on the direction of Fubon Financial i.e., Fubon Financial and Silergy Corp go up and down completely randomly.

Pair Corralation between Fubon Financial and Silergy Corp

Assuming the 90 days trading horizon Fubon Financial Holding is expected to generate 0.36 times more return on investment than Silergy Corp. However, Fubon Financial Holding is 2.76 times less risky than Silergy Corp. It trades about 0.11 of its potential returns per unit of risk. Silergy Corp is currently generating about 0.02 per unit of risk. If you would invest  8,680  in Fubon Financial Holding on September 16, 2024 and sell it today you would earn a total of  680.00  from holding Fubon Financial Holding or generate 7.83% return on investment over 90 days.

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

Fubon Financial Holding  vs.  Silergy Corp

Fubon Financial Holding

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fubon Financial Holding are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Fubon Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Silergy Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Silergy Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Silergy Corp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Fubon Financial and Silergy Corp

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

The idea behind Fubon Financial Holding and Silergy Corp 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 Global Correlations module to find global opportunities by holding instruments from different markets.