Correlation Between Ruentex Industries and Pou Chen
Can any of the company-specific risk be diversified away by investing in both Ruentex Industries and Pou Chen 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 Pou Chen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ruentex Industries and Pou Chen Corp, you can compare the effects of market volatilities on Ruentex Industries and Pou Chen 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 Pou Chen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Industries and Pou Chen.
Diversification Opportunities for Ruentex Industries and Pou Chen
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ruentex and Pou is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Industries and Pou Chen Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pou Chen Corp 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 Pou Chen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pou Chen Corp has no effect on the direction of Ruentex Industries i.e., Ruentex Industries and Pou Chen go up and down completely randomly.
Pair Corralation between Ruentex Industries and Pou Chen
Assuming the 90 days trading horizon Ruentex Industries is expected to generate 2.46 times less return on investment than Pou Chen. But when comparing it to its historical volatility, Ruentex Industries is 1.23 times less risky than Pou Chen. It trades about 0.19 of its potential returns per unit of risk. Pou Chen Corp is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 3,755 in Pou Chen Corp on August 24, 2024 and sell it today you would earn a total of 615.00 from holding Pou Chen Corp or generate 16.38% 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. Pou Chen Corp
Performance |
| Timeline |
| Ruentex Industries |
| Pou Chen Corp |
Ruentex Industries and Pou Chen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Industries and Pou Chen
The main advantage of trading using opposite Ruentex Industries and Pou Chen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Industries position performs unexpectedly, Pou Chen 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 Pou Chen will offset losses from the drop in Pou Chen'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 |
| Pou Chen vs. Uni President Enterprises Corp | Pou Chen vs. Cheng Shin Rubber | Pou Chen vs. Far Eastern New | Pou Chen vs. Formosa Chemicals Fibre |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| 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 | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |