Correlation Between Fubon MSCI and Castles Technology
Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Castles Technology 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 Castles Technology 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 Castles Technology Co, you can compare the effects of market volatilities on Fubon MSCI and Castles Technology 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 Castles Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Castles Technology.
Diversification Opportunities for Fubon MSCI and Castles Technology
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fubon and Castles is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Castles Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castles Technology 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 Castles Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castles Technology has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Castles Technology go up and down completely randomly.
Pair Corralation between Fubon MSCI and Castles Technology
Assuming the 90 days trading horizon Fubon MSCI Taiwan is expected to generate 0.43 times more return on investment than Castles Technology. However, Fubon MSCI Taiwan is 2.34 times less risky than Castles Technology. It trades about 0.06 of its potential returns per unit of risk. Castles Technology Co is currently generating about -0.22 per unit of risk. If you would invest 13,815 in Fubon MSCI Taiwan on September 25, 2024 and sell it today you would earn a total of 615.00 from holding Fubon MSCI Taiwan or generate 4.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Fubon MSCI Taiwan vs. Castles Technology Co
Performance |
Timeline |
Fubon MSCI Taiwan |
Castles Technology |
Fubon MSCI and Castles Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fubon MSCI and Castles Technology
The main advantage of trading using opposite Fubon MSCI and Castles Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon MSCI position performs unexpectedly, Castles Technology 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 Castles Technology will offset losses from the drop in Castles Technology's long position.Fubon MSCI vs. YuantaP shares Taiwan Top | Fubon MSCI vs. Yuanta Daily Taiwan | Fubon MSCI vs. Cathay Taiwan 5G | Fubon MSCI vs. Yuanta Daily CSI |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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