Correlation Between Fubon Financial and Ma Kuang
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Ma Kuang 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 Ma Kuang 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 Ma Kuang Healthcare, you can compare the effects of market volatilities on Fubon Financial and Ma Kuang 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 Ma Kuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Ma Kuang.
Diversification Opportunities for Fubon Financial and Ma Kuang
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fubon and 4139 is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Ma Kuang Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ma Kuang Healthcare 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 Ma Kuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ma Kuang Healthcare has no effect on the direction of Fubon Financial i.e., Fubon Financial and Ma Kuang go up and down completely randomly.
Pair Corralation between Fubon Financial and Ma Kuang
Assuming the 90 days trading horizon Fubon Financial Holding is expected to generate 0.12 times more return on investment than Ma Kuang. However, Fubon Financial Holding is 8.17 times less risky than Ma Kuang. It trades about 0.19 of its potential returns per unit of risk. Ma Kuang Healthcare is currently generating about -0.23 per unit of risk. If you would invest 6,310 in Fubon Financial Holding on December 29, 2024 and sell it today you would earn a total of 90.00 from holding Fubon Financial Holding or generate 1.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fubon Financial Holding vs. Ma Kuang Healthcare
Performance |
Timeline |
Fubon Financial Holding |
Ma Kuang Healthcare |
Fubon Financial and Ma Kuang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fubon Financial and Ma Kuang
The main advantage of trading using opposite Fubon Financial and Ma Kuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Ma Kuang 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 Ma Kuang will offset losses from the drop in Ma Kuang's long position.Fubon Financial vs. Yufo Electronics Co | Fubon Financial vs. China Development Financial | Fubon Financial vs. CTBC Financial Holding | Fubon Financial vs. Cathay Financial Holding |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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