Correlation Between Ruentex Industries and CTBC Financial
Can any of the company-specific risk be diversified away by investing in both Ruentex Industries and CTBC Financial 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 CTBC Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ruentex Industries and CTBC Financial Holding, you can compare the effects of market volatilities on Ruentex Industries and CTBC Financial 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 CTBC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Industries and CTBC Financial.
Diversification Opportunities for Ruentex Industries and CTBC Financial
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ruentex and CTBC is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Industries and CTBC Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTBC Financial Holding 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 CTBC Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTBC Financial Holding has no effect on the direction of Ruentex Industries i.e., Ruentex Industries and CTBC Financial go up and down completely randomly.
Pair Corralation between Ruentex Industries and CTBC Financial
Assuming the 90 days trading horizon Ruentex Industries is expected to generate 1.17 times less return on investment than CTBC Financial. In addition to that, Ruentex Industries is 1.19 times more volatile than CTBC Financial Holding. It trades about 0.08 of its total potential returns per unit of risk. CTBC Financial Holding is currently generating about 0.12 per unit of volatility. If you would invest 2,435 in CTBC Financial Holding on August 25, 2024 and sell it today you would earn a total of 1,340 from holding CTBC Financial Holding or generate 55.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ruentex Industries vs. CTBC Financial Holding
Performance |
| Timeline |
| Ruentex Industries |
| CTBC Financial Holding |
Ruentex Industries and CTBC Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Industries and CTBC Financial
The main advantage of trading using opposite Ruentex Industries and CTBC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Industries position performs unexpectedly, CTBC Financial 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 CTBC Financial will offset losses from the drop in CTBC Financial'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 |
| CTBC Financial vs. Fubon Financial Holding | CTBC Financial vs. Cathay Financial Holding | CTBC Financial vs. Mega Financial Holding | CTBC Financial vs. First 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |