Correlation Between Ruentex Industries and Nantex Industry
Can any of the company-specific risk be diversified away by investing in both Ruentex Industries and Nantex Industry 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 Industries and Nantex Industry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ruentex Industries and Nantex Industry Co, you can compare the effects of market volatilities on Ruentex Industries and Nantex Industry 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 Industries with a short position of Nantex Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Industries and Nantex Industry.
Diversification Opportunities for Ruentex Industries and Nantex Industry
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ruentex and Nantex is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Industries and Nantex Industry Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nantex Industry and Ruentex Industries 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 Industries are associated (or correlated) with Nantex Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nantex Industry has no effect on the direction of Ruentex Industries i.e., Ruentex Industries and Nantex Industry go up and down completely randomly.
Pair Corralation between Ruentex Industries and Nantex Industry
Assuming the 90 days trading horizon Ruentex Industries is expected to generate 0.99 times more return on investment than Nantex Industry. However, Ruentex Industries is 1.01 times less risky than Nantex Industry. It trades about 0.05 of its potential returns per unit of risk. Nantex Industry Co is currently generating about -0.07 per unit of risk. If you would invest 7,630 in Ruentex Industries on September 1, 2024 and sell it today you would earn a total of 110.00 from holding Ruentex Industries or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ruentex Industries vs. Nantex Industry Co
Performance |
| Timeline |
| Ruentex Industries |
| Nantex Industry |
Ruentex Industries and Nantex Industry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Industries and Nantex Industry
The main advantage of trading using opposite Ruentex Industries and Nantex Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Industries position performs unexpectedly, Nantex Industry 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 Nantex Industry will offset losses from the drop in Nantex Industry's long position.| Ruentex Industries vs. Ruentex Development Co | Ruentex Industries vs. Fubon Financial Holding | Ruentex Industries vs. Cathay Financial Holding | Ruentex Industries vs. Pou Chen Corp |
| Nantex Industry vs. Basso Industry Corp | Nantex Industry vs. Chung Hsin Electric Machinery | Nantex Industry vs. TYC Brother Industrial | Nantex Industry vs. TECO Electric Machinery |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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