Correlation Between Fubon MSCI and Cowealth Medical
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Cowealth Medical 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 Cowealth Medical 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 Cowealth Medical Holding, you can compare the effects of market volatilities on Fubon MSCI and Cowealth Medical 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 Cowealth Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Cowealth Medical.
Diversification Opportunities for Fubon MSCI and Cowealth Medical
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fubon and Cowealth is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Cowealth Medical Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cowealth Medical Holding 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 Cowealth Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cowealth Medical Holding has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Cowealth Medical go up and down completely randomly.
Pair Corralation between Fubon MSCI and Cowealth Medical
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 3.14 times more return on investment than Cowealth Medical. However, Fubon MSCI is 3.14 times more volatile than Cowealth Medical Holding. It trades about 0.01 of its potential returns per unit of risk. Cowealth Medical Holding is currently generating about -0.15 per unit of risk. If you would invest 11,775 in Fubon MSCI Taiwan on February 2, 2024 and sell it today you would earn a total of 10.00 from holding Fubon MSCI Taiwan or generate 0.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fubon MSCI Taiwan vs. Cowealth Medical Holding
Performance |
Timeline |
Fubon MSCI Taiwan |
Cowealth Medical Holding |
Fubon MSCI and Cowealth Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fubon MSCI and Cowealth Medical
The main advantage of trading using opposite Fubon MSCI and Cowealth Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Cowealth Medical 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 Cowealth Medical will offset losses from the drop in Cowealth Medical's long position.Fubon MSCI vs. Yuanta Daily Taiwan | Fubon MSCI vs. Yuanta Daily CSI | Fubon MSCI vs. Cathay Sustainability High | Fubon MSCI vs. Fubon FTSE Vietnam |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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