Correlation Between Provision Information and Fubon Financial

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Provision Information 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 Provision Information and Fubon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Provision Information CoLtd and Fubon Financial Holding, you can compare the effects of market volatilities on Provision Information 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 Provision Information with a short position of Fubon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Provision Information and Fubon Financial.

Diversification Opportunities for Provision Information and Fubon Financial

ProvisionFubonDiversified AwayProvisionFubonDiversified Away100%
0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between Provision and Fubon is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Provision Information CoLtd 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 Provision Information 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 Provision Information CoLtd 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 Provision Information i.e., Provision Information and Fubon Financial go up and down completely randomly.

Pair Corralation between Provision Information and Fubon Financial

Assuming the 90 days trading horizon Provision Information is expected to generate 1.84 times less return on investment than Fubon Financial. In addition to that, Provision Information is 1.24 times more volatile than Fubon Financial Holding. It trades about 0.01 of its total potential returns per unit of risk. Fubon Financial Holding is currently generating about 0.02 per unit of volatility. If you would invest  9,080  in Fubon Financial Holding on September 20, 2024 and sell it today you would earn a total of  110.00  from holding Fubon Financial Holding or generate 1.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Provision Information CoLtd  vs.  Fubon Financial Holding

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -4-202468
JavaScript chart by amCharts 3.21.156590 2881
       Timeline  
Provision Information 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Provision Information CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Provision Information is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec6970717273747576
Fubon Financial Holding 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Fubon Financial Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Fubon Financial is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec88899091929394

Provision Information and Fubon Financial Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.9-3.67-2.44-1.210.01.192.443.694.946.19 0.050.100.150.200.250.30
JavaScript chart by amCharts 3.21.156590 2881
       Returns  

Pair Trading with Provision Information and Fubon Financial

The main advantage of trading using opposite Provision Information and Fubon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Provision Information 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.
The idea behind Provision Information CoLtd and Fubon Financial Holding 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

Other Complementary Tools

Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years