Correlation Between Kee Tai and Ruentex Engineering
Can any of the company-specific risk be diversified away by investing in both Kee Tai and Ruentex Engineering 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 Kee Tai and Ruentex Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kee Tai Properties and Ruentex Engineering Construction, you can compare the effects of market volatilities on Kee Tai and Ruentex Engineering 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 Kee Tai with a short position of Ruentex Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kee Tai and Ruentex Engineering.
Diversification Opportunities for Kee Tai and Ruentex Engineering
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kee and Ruentex is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kee Tai Properties and Ruentex Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ruentex Engineering and Kee Tai 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 Kee Tai Properties are associated (or correlated) with Ruentex Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ruentex Engineering has no effect on the direction of Kee Tai i.e., Kee Tai and Ruentex Engineering go up and down completely randomly.
Pair Corralation between Kee Tai and Ruentex Engineering
Assuming the 90 days trading horizon Kee Tai Properties is expected to under-perform the Ruentex Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Kee Tai Properties is 1.11 times less risky than Ruentex Engineering. The stock trades about -0.19 of its potential returns per unit of risk. The Ruentex Engineering Construction is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 15,050 in Ruentex Engineering Construction on September 2, 2024 and sell it today you would lose (750.00) from holding Ruentex Engineering Construction or give up 4.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kee Tai Properties vs. Ruentex Engineering Constructi
Performance |
| Timeline |
| Kee Tai Properties |
| Ruentex Engineering |
Kee Tai and Ruentex Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kee Tai and Ruentex Engineering
The main advantage of trading using opposite Kee Tai and Ruentex Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kee Tai position performs unexpectedly, Ruentex Engineering 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 Engineering will offset losses from the drop in Ruentex Engineering's long position.| Kee Tai vs. Ruentex Development Co | Kee Tai vs. CTCI Corp | Kee Tai vs. Information Technology Total | Kee Tai vs. Ennoconn Corp |
| Ruentex Engineering vs. BES Engineering Co | Ruentex Engineering vs. Continental Holdings Corp | Ruentex Engineering vs. Kee Tai Properties | Ruentex Engineering vs. Hung Sheng Construction |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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