Correlation Between Fubon MSCI and Well Shin

Can any of the company-specific risk be diversified away by investing in both Fubon MSCI and Well Shin 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 Well Shin 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 Well Shin Technology, you can compare the effects of market volatilities on Fubon MSCI and Well Shin 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 Well Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon MSCI and Well Shin.

Diversification Opportunities for Fubon MSCI and Well Shin

0.0

Correlation Coefficient

Fubon MSCI  Well Shin

Pay attention - limited upside

The 3 months correlation between Fubon and Well is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fubon MSCI Taiwan and Well Shin Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Well Shin 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 Well Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Well Shin Technology has no effect on the direction of Fubon MSCI i.e., Fubon MSCI and Well Shin go up and down completely randomly.

Pair Corralation between Fubon MSCI and Well Shin

If you would invest  0.00  in Well Shin Technology on January 29, 2024 and sell it today you would earn a total of  0.00  from holding Well Shin Technology or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Fubon MSCI Taiwan  vs.  Well Shin Technology

Fubon MSCI Taiwan

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fubon MSCI Taiwan are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Fubon MSCI showed solid returns over the last few months and may actually be approaching a breakup point.

Well Shin Technology

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Well Shin Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Well Shin is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Fubon MSCI and Well Shin

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

The idea behind Fubon MSCI Taiwan and Well Shin Technology 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.