Correlation Between Ruentex Engineering and Actron Technology
Can any of the company-specific risk be diversified away by investing in both Ruentex Engineering and Actron 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 Ruentex Engineering and Actron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ruentex Engineering Construction and Actron Technology, you can compare the effects of market volatilities on Ruentex Engineering and Actron 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 Ruentex Engineering with a short position of Actron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Engineering and Actron Technology.
Diversification Opportunities for Ruentex Engineering and Actron Technology
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ruentex and Actron is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Engineering Constructi and Actron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actron Technology and Ruentex Engineering 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 Ruentex Engineering Construction are associated (or correlated) with Actron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actron Technology has no effect on the direction of Ruentex Engineering i.e., Ruentex Engineering and Actron Technology go up and down completely randomly.
Pair Corralation between Ruentex Engineering and Actron Technology
Assuming the 90 days trading horizon Ruentex Engineering Construction is expected to generate 1.2 times more return on investment than Actron Technology. However, Ruentex Engineering is 1.2 times more volatile than Actron Technology. It trades about 0.14 of its potential returns per unit of risk. Actron Technology is currently generating about -0.02 per unit of risk. If you would invest 13,800 in Ruentex Engineering Construction on September 2, 2024 and sell it today you would earn a total of 500.00 from holding Ruentex Engineering Construction or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ruentex Engineering Constructi vs. Actron Technology
Performance |
| Timeline |
| Ruentex Engineering |
| Actron Technology |
Ruentex Engineering and Actron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Engineering and Actron Technology
The main advantage of trading using opposite Ruentex Engineering and Actron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Engineering position performs unexpectedly, Actron 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 Actron Technology will offset losses from the drop in Actron Technology's long position.| Ruentex Engineering vs. BES Engineering Co | Ruentex Engineering vs. Continental Holdings Corp | Ruentex Engineering vs. Kee Tai Properties | Ruentex Engineering vs. Hung Sheng Construction |
| Actron Technology vs. Hota Industrial Mfg | Actron Technology vs. BizLink Holding | Actron Technology vs. Cub Elecparts | Actron Technology vs. Hu Lane Associate |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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