Correlation Between Ruentex Materials and An Shin
Can any of the company-specific risk be diversified away by investing in both Ruentex Materials and An Shin 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 Materials and An Shin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ruentex Materials Co and An Shin Food Services, you can compare the effects of market volatilities on Ruentex Materials and An Shin 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 Materials with a short position of An Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Materials and An Shin.
Diversification Opportunities for Ruentex Materials and An Shin
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ruentex and 1259 is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Materials Co and An Shin Food Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on An Shin Food and Ruentex Materials 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 Materials Co are associated (or correlated) with An Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of An Shin Food has no effect on the direction of Ruentex Materials i.e., Ruentex Materials and An Shin go up and down completely randomly.
Pair Corralation between Ruentex Materials and An Shin
Assuming the 90 days trading horizon Ruentex Materials Co is expected to generate 3.5 times more return on investment than An Shin. However, Ruentex Materials is 3.5 times more volatile than An Shin Food Services. It trades about -0.03 of its potential returns per unit of risk. An Shin Food Services is currently generating about -0.15 per unit of risk. If you would invest 2,890 in Ruentex Materials Co on August 31, 2024 and sell it today you would lose (280.00) from holding Ruentex Materials Co or give up 9.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ruentex Materials Co vs. An Shin Food Services
Performance |
| Timeline |
| Ruentex Materials |
| An Shin Food |
Ruentex Materials and An Shin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Materials and An Shin
The main advantage of trading using opposite Ruentex Materials and An Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Materials position performs unexpectedly, An Shin 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 An Shin will offset losses from the drop in An Shin's long position.| Ruentex Materials vs. Taiwan Cement Corp | Ruentex Materials vs. Asia Cement Corp | Ruentex Materials vs. Goldsun Building Materials | Ruentex Materials vs. Universal Cement Corp |
| An Shin vs. Gourmet Master Co | An Shin vs. Wowprime Corp | An Shin vs. Hi Lai Foods Co | An Shin vs. Louisa Professional Coffee |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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