Correlation Between Genesis Technology and Fubon MSCI

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

By analyzing existing cross correlation between Genesis Technology and Fubon MSCI Taiwan, you can compare the effects of market volatilities on Genesis Technology and Fubon MSCI 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 Genesis Technology with a short position of Fubon MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genesis Technology and Fubon MSCI.

Diversification Opportunities for Genesis Technology and Fubon MSCI

0.9

Correlation Coefficient

Genesis Technology  Fubon MSCI

Almost no diversification

The 3 months correlation between Genesis and Fubon is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Genesis Technology and Fubon MSCI Taiwan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon MSCI Taiwan and Genesis Technology 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 Genesis Technology are associated (or correlated) with Fubon MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon MSCI Taiwan has no effect on the direction of Genesis Technology i.e., Genesis Technology and Fubon MSCI go up and down completely randomly.

Pair Corralation between Genesis Technology and Fubon MSCI

Assuming the 90 days trading horizon Genesis Technology is expected to generate 0.64 times more return on investment than Fubon MSCI. However, Genesis Technology is 1.56 times less risky than Fubon MSCI. It trades about 0.41 of its potential returns per unit of risk. Fubon MSCI Taiwan is currently generating about -0.11 per unit of risk. If you would invest  7,620  in Genesis Technology on January 25, 2024 and sell it today you would earn a total of  630.00  from holding Genesis Technology or generate 8.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Genesis Technology  vs.  Fubon MSCI Taiwan

Genesis Technology

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Genesis Technology are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Genesis Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Fubon MSCI Taiwan

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fubon MSCI Taiwan are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Fubon MSCI showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genesis Technology and Fubon MSCI

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

The idea behind Genesis Technology and Fubon MSCI Taiwan 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 Commodity Directory module to find actively traded commodities issued by global exchanges.