Correlation Between Fubon Financial and Onano Industrial
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Onano Industrial 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 Onano Industrial 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 Onano Industrial Corp, you can compare the effects of market volatilities on Fubon Financial and Onano Industrial 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 Onano Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Onano Industrial.
Diversification Opportunities for Fubon Financial and Onano Industrial
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fubon and Onano is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Onano Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onano Industrial 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 Onano Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onano Industrial Corp has no effect on the direction of Fubon Financial i.e., Fubon Financial and Onano Industrial go up and down completely randomly.
Pair Corralation between Fubon Financial and Onano Industrial
Assuming the 90 days trading horizon Fubon Financial Holding is expected to generate 0.06 times more return on investment than Onano Industrial. However, Fubon Financial Holding is 17.84 times less risky than Onano Industrial. It trades about -0.07 of its potential returns per unit of risk. Onano Industrial Corp is currently generating about -0.26 per unit of risk. If you would invest 6,310 in Fubon Financial Holding on October 15, 2024 and sell it today you would lose (10.00) from holding Fubon Financial Holding or give up 0.16% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fubon Financial Holding vs. Onano Industrial Corp
Performance |
Timeline |
Fubon Financial Holding |
Onano Industrial Corp |
Fubon Financial and Onano Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fubon Financial and Onano Industrial
The main advantage of trading using opposite Fubon Financial and Onano Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Onano Industrial 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 Onano Industrial will offset losses from the drop in Onano Industrial's long position.Fubon Financial vs. RiTdisplay Corp | Fubon Financial vs. Chailease Holding Co | Fubon Financial vs. Level Biotechnology | Fubon Financial vs. Insyde Software |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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