Correlation Between Fubon Financial and Topco Scientific
Can any of the company-specific risk be diversified away by investing in both Fubon Financial and Topco Scientific 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 Topco Scientific 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 Topco Scientific Co, you can compare the effects of market volatilities on Fubon Financial and Topco Scientific 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 Topco Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Topco Scientific.
Diversification Opportunities for Fubon Financial and Topco Scientific
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fubon and Topco is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Topco Scientific Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Topco Scientific 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 Topco Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Topco Scientific has no effect on the direction of Fubon Financial i.e., Fubon Financial and Topco Scientific go up and down completely randomly.
Pair Corralation between Fubon Financial and Topco Scientific
Assuming the 90 days trading horizon Fubon Financial Holding is expected to generate 0.09 times more return on investment than Topco Scientific. However, Fubon Financial Holding is 11.2 times less risky than Topco Scientific. It trades about 0.45 of its potential returns per unit of risk. Topco Scientific Co is currently generating about -0.08 per unit of risk. If you would invest 6,020 in Fubon Financial Holding on December 30, 2024 and sell it today you would earn a total of 190.00 from holding Fubon Financial Holding or generate 3.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Fubon Financial Holding vs. Topco Scientific Co
Performance |
Timeline |
Fubon Financial Holding |
Topco Scientific |
Fubon Financial and Topco Scientific Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fubon Financial and Topco Scientific
The main advantage of trading using opposite Fubon Financial and Topco Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial position performs unexpectedly, Topco Scientific 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 Topco Scientific will offset losses from the drop in Topco Scientific's long position.Fubon Financial vs. Arima Communications Corp | Fubon Financial vs. Chernan Metal Industrial | Fubon Financial vs. Professional Computer Technology | Fubon Financial vs. Feng Ching Metal |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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