Correlation Between Ruentex Development and YuantaP Shares
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and YuantaP Shares 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 Development and YuantaP Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ruentex Development Co and YuantaP shares Taiwan Mid Cap, you can compare the effects of market volatilities on Ruentex Development and YuantaP Shares 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 Development with a short position of YuantaP Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and YuantaP Shares.
Diversification Opportunities for Ruentex Development and YuantaP Shares
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ruentex and YuantaP is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and YuantaP shares Taiwan Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YuantaP shares Taiwan and Ruentex Development 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 Development Co are associated (or correlated) with YuantaP Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YuantaP shares Taiwan has no effect on the direction of Ruentex Development i.e., Ruentex Development and YuantaP Shares go up and down completely randomly.
Pair Corralation between Ruentex Development and YuantaP Shares
Assuming the 90 days trading horizon Ruentex Development Co is expected to generate 1.57 times more return on investment than YuantaP Shares. However, Ruentex Development is 1.57 times more volatile than YuantaP shares Taiwan Mid Cap. It trades about 0.01 of its potential returns per unit of risk. YuantaP shares Taiwan Mid Cap is currently generating about -0.03 per unit of risk. If you would invest 4,515 in Ruentex Development Co on September 3, 2024 and sell it today you would lose (35.00) from holding Ruentex Development Co or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ruentex Development Co vs. YuantaP shares Taiwan Mid Cap
Performance |
| Timeline |
| Ruentex Development |
| YuantaP shares Taiwan |
Ruentex Development and YuantaP Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and YuantaP Shares
The main advantage of trading using opposite Ruentex Development and YuantaP Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, YuantaP Shares 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 YuantaP Shares will offset losses from the drop in YuantaP Shares' long position.| Ruentex Development vs. Ruentex Industries | Ruentex Development vs. Pou Chen Corp | Ruentex Development vs. Fubon Financial Holding | Ruentex Development vs. Cathay Financial Holding |
| YuantaP Shares vs. Cathay Taiwan 5G | YuantaP Shares vs. Ruentex Development Co | YuantaP Shares vs. Symtek Automation Asia | YuantaP Shares vs. CTCI 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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