Correlation Between Ruentex Development and Sinopac TAIEX
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Sinopac TAIEX 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 Sinopac TAIEX 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 Sinopac TAIEX ETF, you can compare the effects of market volatilities on Ruentex Development and Sinopac TAIEX 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 Sinopac TAIEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Sinopac TAIEX.
Diversification Opportunities for Ruentex Development and Sinopac TAIEX
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ruentex and Sinopac is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Sinopac TAIEX ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopac TAIEX ETF 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 Sinopac TAIEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopac TAIEX ETF has no effect on the direction of Ruentex Development i.e., Ruentex Development and Sinopac TAIEX go up and down completely randomly.
Pair Corralation between Ruentex Development and Sinopac TAIEX
Assuming the 90 days trading horizon Ruentex Development Co is expected to under-perform the Sinopac TAIEX. In addition to that, Ruentex Development is 1.12 times more volatile than Sinopac TAIEX ETF. It trades about -0.14 of its total potential returns per unit of risk. Sinopac TAIEX ETF is currently generating about -0.03 per unit of volatility. If you would invest 11,485 in Sinopac TAIEX ETF on September 4, 2024 and sell it today you would lose (85.00) from holding Sinopac TAIEX ETF or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ruentex Development Co vs. Sinopac TAIEX ETF
Performance |
| Timeline |
| Ruentex Development |
| Sinopac TAIEX ETF |
Ruentex Development and Sinopac TAIEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and Sinopac TAIEX
The main advantage of trading using opposite Ruentex Development and Sinopac TAIEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Sinopac TAIEX 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 Sinopac TAIEX will offset losses from the drop in Sinopac TAIEX's 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 |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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