Correlation Between Sinopac Securities and Ruentex Development
Can any of the company-specific risk be diversified away by investing in both Sinopac Securities and Ruentex Development 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 Sinopac Securities and Ruentex Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinopac Securities Corp and Ruentex Development Co, you can compare the effects of market volatilities on Sinopac Securities and Ruentex Development 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 Sinopac Securities with a short position of Ruentex Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinopac Securities and Ruentex Development.
Diversification Opportunities for Sinopac Securities and Ruentex Development
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sinopac and Ruentex is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sinopac Securities Corp and Ruentex Development Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ruentex Development and Sinopac Securities 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 Sinopac Securities Corp are associated (or correlated) with Ruentex Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ruentex Development has no effect on the direction of Sinopac Securities i.e., Sinopac Securities and Ruentex Development go up and down completely randomly.
Pair Corralation between Sinopac Securities and Ruentex Development
Assuming the 90 days trading horizon Sinopac Securities Corp is expected to generate 1.87 times more return on investment than Ruentex Development. However, Sinopac Securities is 1.87 times more volatile than Ruentex Development Co. It trades about 0.06 of its potential returns per unit of risk. Ruentex Development Co is currently generating about -0.1 per unit of risk. If you would invest 854.00 in Sinopac Securities Corp on September 5, 2024 and sell it today you would earn a total of 22.00 from holding Sinopac Securities Corp or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinopac Securities Corp vs. Ruentex Development Co
Performance |
| Timeline |
| Sinopac Securities Corp |
| Ruentex Development |
Sinopac Securities and Ruentex Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinopac Securities and Ruentex Development
The main advantage of trading using opposite Sinopac Securities and Ruentex Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinopac Securities position performs unexpectedly, Ruentex Development 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 Ruentex Development will offset losses from the drop in Ruentex Development's long position.| Sinopac Securities vs. Ruentex Development Co | Sinopac Securities vs. Symtek Automation Asia | Sinopac Securities vs. CTCI Corp | Sinopac Securities vs. Information Technology Total |
| Ruentex Development vs. Ruentex Industries | Ruentex Development vs. Pou Chen Corp | Ruentex Development vs. Fubon Financial Holding | Ruentex Development vs. Cathay Financial Holding |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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