Correlation Between Cathay Sustainability and Fubon 1

Can any of the company-specific risk be diversified away by investing in both Cathay Sustainability and Fubon 1 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 Cathay Sustainability and Fubon 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cathay Sustainability High and Fubon 1 3 Years, you can compare the effects of market volatilities on Cathay Sustainability and Fubon 1 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 Cathay Sustainability with a short position of Fubon 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathay Sustainability and Fubon 1.

Diversification Opportunities for Cathay Sustainability and Fubon 1

-0.86

Correlation Coefficient

Cathay Sustainability  Fubon 1

Pay attention - limited upside

The 3 months correlation between Cathay and Fubon is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Cathay Sustainability High and Fubon 1 3 Years in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon 1 3 and Cathay Sustainability 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 Cathay Sustainability High are associated (or correlated) with Fubon 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon 1 3 has no effect on the direction of Cathay Sustainability i.e., Cathay Sustainability and Fubon 1 go up and down completely randomly.

Pair Corralation between Cathay Sustainability and Fubon 1

Assuming the 90 days trading horizon Cathay Sustainability High is expected to generate 0.64 times more return on investment than Fubon 1. However, Cathay Sustainability High is 1.57 times less risky than Fubon 1. It trades about 0.21 of its potential returns per unit of risk. Fubon 1 3 Years is currently generating about -0.16 per unit of risk. If you would invest  1,965  in Cathay Sustainability High on April 25, 2025 and sell it today you would earn a total of  154.00  from holding Cathay Sustainability High or generate 7.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Cathay Sustainability High  vs.  Fubon 1 3 Years

Cathay Sustainability

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cathay Sustainability High are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cathay Sustainability may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Fubon 1 3

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fubon 1 3 Years has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with Cathay Sustainability and Fubon 1

The main advantage of trading using opposite Cathay Sustainability and Fubon 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathay Sustainability position performs unexpectedly, Fubon 1 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 1 will offset losses from the drop in Fubon 1's long position.

The idea behind Cathay Sustainability High and Fubon 1 3 Years 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.