Correlation Between Tong Hsing and Ruentex Engineering
Can any of the company-specific risk be diversified away by investing in both Tong Hsing 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 Tong Hsing and Ruentex Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tong Hsing Electronic and Ruentex Engineering Construction, you can compare the effects of market volatilities on Tong Hsing 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 Tong Hsing with a short position of Ruentex Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tong Hsing and Ruentex Engineering.
Diversification Opportunities for Tong Hsing and Ruentex Engineering
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tong and Ruentex is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Tong Hsing Electronic and Ruentex Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ruentex Engineering and Tong Hsing 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 Tong Hsing Electronic 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 Tong Hsing i.e., Tong Hsing and Ruentex Engineering go up and down completely randomly.
Pair Corralation between Tong Hsing and Ruentex Engineering
Assuming the 90 days trading horizon Tong Hsing Electronic is expected to under-perform the Ruentex Engineering. In addition to that, Tong Hsing is 1.25 times more volatile than Ruentex Engineering Construction. It trades about -0.22 of its total potential returns per unit of risk. Ruentex Engineering Construction is currently generating about 0.1 per unit of volatility. If you would invest 14,850 in Ruentex Engineering Construction on October 24, 2024 and sell it today you would earn a total of 450.00 from holding Ruentex Engineering Construction or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tong Hsing Electronic vs. Ruentex Engineering Constructi
Performance |
| Timeline |
| Tong Hsing Electronic |
| Ruentex Engineering |
Tong Hsing and Ruentex Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tong Hsing and Ruentex Engineering
The main advantage of trading using opposite Tong Hsing and Ruentex Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tong Hsing 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.| Tong Hsing vs. Kinsus Interconnect Technology | Tong Hsing vs. Unimicron Technology Corp | Tong Hsing vs. Nan Ya Printed | Tong Hsing vs. WIN Semiconductors |
| Ruentex Engineering vs. Ruentex Industries | Ruentex Engineering vs. Huaku Development Co | Ruentex Engineering vs. Ruentex Development Co | Ruentex Engineering vs. Highwealth Construction Corp |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |