Correlation Between Farglory FTZ and Fubon Financial
Can any of the company-specific risk be diversified away by investing in both Farglory FTZ and Fubon Financial 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 Farglory FTZ and Fubon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farglory FTZ Investment and Fubon Financial Holding, you can compare the effects of market volatilities on Farglory FTZ and Fubon Financial 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 Farglory FTZ with a short position of Fubon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farglory FTZ and Fubon Financial.
Diversification Opportunities for Farglory FTZ and Fubon Financial
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Farglory and Fubon is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Farglory FTZ Investment and Fubon Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon Financial Holding and Farglory FTZ 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 Farglory FTZ Investment are associated (or correlated) with Fubon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon Financial Holding has no effect on the direction of Farglory FTZ i.e., Farglory FTZ and Fubon Financial go up and down completely randomly.
Pair Corralation between Farglory FTZ and Fubon Financial
Assuming the 90 days trading horizon Farglory FTZ Investment is expected to under-perform the Fubon Financial. In addition to that, Farglory FTZ is 1.01 times more volatile than Fubon Financial Holding. It trades about -0.08 of its total potential returns per unit of risk. Fubon Financial Holding is currently generating about 0.11 per unit of volatility. If you would invest 8,710 in Fubon Financial Holding on September 18, 2024 and sell it today you would earn a total of 660.00 from holding Fubon Financial Holding or generate 7.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Farglory FTZ Investment vs. Fubon Financial Holding
Performance |
Timeline |
Farglory FTZ Investment |
Fubon Financial Holding |
Farglory FTZ and Fubon Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Farglory FTZ and Fubon Financial
The main advantage of trading using opposite Farglory FTZ and Fubon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farglory FTZ position performs unexpectedly, Fubon Financial 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 Fubon Financial will offset losses from the drop in Fubon Financial's long position.Farglory FTZ vs. Evergreen International Storage | Farglory FTZ vs. China Container Terminal | Farglory FTZ vs. Sincere Navigation Corp | Farglory FTZ vs. CSBC Corp Taiwan |
Fubon Financial vs. Farglory FTZ Investment | Fubon Financial vs. Chun Yuan Steel | Fubon Financial vs. Feng Hsin Steel | Fubon Financial vs. STARLUX Airlines Co |
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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