Correlation Between CTCI Corp and Ruentex Materials
Can any of the company-specific risk be diversified away by investing in both CTCI Corp and Ruentex Materials 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 CTCI Corp and Ruentex Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTCI Corp and Ruentex Materials Co, you can compare the effects of market volatilities on CTCI Corp and Ruentex Materials 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 CTCI Corp with a short position of Ruentex Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTCI Corp and Ruentex Materials.
Diversification Opportunities for CTCI Corp and Ruentex Materials
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CTCI and Ruentex is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding CTCI Corp and Ruentex Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ruentex Materials and CTCI Corp 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 CTCI Corp are associated (or correlated) with Ruentex Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ruentex Materials has no effect on the direction of CTCI Corp i.e., CTCI Corp and Ruentex Materials go up and down completely randomly.
Pair Corralation between CTCI Corp and Ruentex Materials
Assuming the 90 days trading horizon CTCI Corp is expected to under-perform the Ruentex Materials. But the stock apears to be less risky and, when comparing its historical volatility, CTCI Corp is 1.42 times less risky than Ruentex Materials. The stock trades about -0.36 of its potential returns per unit of risk. The Ruentex Materials Co is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 2,710 in Ruentex Materials Co on September 1, 2024 and sell it today you would lose (100.00) from holding Ruentex Materials Co or give up 3.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTCI Corp vs. Ruentex Materials Co
Performance |
| Timeline |
| CTCI Corp |
| Ruentex Materials |
CTCI Corp and Ruentex Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTCI Corp and Ruentex Materials
The main advantage of trading using opposite CTCI Corp and Ruentex Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTCI Corp position performs unexpectedly, Ruentex Materials 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 Materials will offset losses from the drop in Ruentex Materials' long position.| CTCI Corp vs. Taiwan Secom Co | CTCI Corp vs. Pou Chen Corp | CTCI Corp vs. Formosa Petrochemical Corp | CTCI Corp vs. Cheng Shin Rubber |
| Ruentex Materials vs. Taiwan Cement Corp | Ruentex Materials vs. Asia Cement Corp | Ruentex Materials vs. Goldsun Building Materials | Ruentex Materials vs. Universal Cement 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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