Correlation Between Fubon MSCI and Tsann Kuen
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Tsann Kuen 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 MSCI and Tsann Kuen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fubon MSCI Taiwan and Tsann Kuen Enterprise, you can compare the effects of market volatilities on Fubon MSCI and Tsann Kuen 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 MSCI with a short position of Tsann Kuen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Tsann Kuen.
Diversification Opportunities for Fubon MSCI and Tsann Kuen
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fubon and Tsann is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Tsann Kuen Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsann Kuen Enterprise and Fubon MSCI 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 MSCI Taiwan are associated (or correlated) with Tsann Kuen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsann Kuen Enterprise has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Tsann Kuen go up and down completely randomly.
Pair Corralation between Fubon MSCI and Tsann Kuen
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 2.02 times more return on investment than Tsann Kuen. However, Fubon MSCI is 2.02 times more volatile than Tsann Kuen Enterprise. It trades about -0.03 of its potential returns per unit of risk. Tsann Kuen Enterprise is currently generating about -0.13 per unit of risk. If you would invest 11,780 in Fubon MSCI Taiwan on February 6, 2024 and sell it today you would lose (170.00) from holding Fubon MSCI Taiwan or give up 1.44% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fubon MSCI Taiwan vs. Tsann Kuen Enterprise
Performance |
Timeline |
Fubon MSCI Taiwan |
Tsann Kuen Enterprise |
Fubon MSCI and Tsann Kuen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fubon MSCI and Tsann Kuen
The main advantage of trading using opposite Fubon MSCI and Tsann Kuen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Tsann Kuen 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 Tsann Kuen will offset losses from the drop in Tsann Kuen's long position.Fubon MSCI vs. Fubon Hang Seng | Fubon MSCI vs. Fubon SP Preferred | Fubon MSCI vs. Fubon NASDAQ 100 1X | Fubon MSCI vs. Fubon TWSE Corporate |
Tsann Kuen vs. Chaintech Technology Corp | Tsann Kuen vs. Avision | Tsann Kuen vs. Clevo Co | Tsann Kuen vs. Elitegroup Computer Systems |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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