Correlation Between Ruentex Development and Yuanta Daily
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Yuanta Daily 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 Yuanta Daily 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 Yuanta Daily SP, you can compare the effects of market volatilities on Ruentex Development and Yuanta Daily 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 Yuanta Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Yuanta Daily.
Diversification Opportunities for Ruentex Development and Yuanta Daily
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ruentex and Yuanta is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Yuanta Daily SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Daily SP 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 Yuanta Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Daily SP has no effect on the direction of Ruentex Development i.e., Ruentex Development and Yuanta Daily go up and down completely randomly.
Pair Corralation between Ruentex Development and Yuanta Daily
Assuming the 90 days trading horizon Ruentex Development Co is expected to generate 1.77 times more return on investment than Yuanta Daily. However, Ruentex Development is 1.77 times more volatile than Yuanta Daily SP. It trades about 0.01 of its potential returns per unit of risk. Yuanta Daily SP is currently generating about -0.07 per unit of risk. If you would invest 4,245 in Ruentex Development Co on December 1, 2024 and sell it today you would earn a total of 5.00 from holding Ruentex Development Co or generate 0.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ruentex Development Co vs. Yuanta Daily SP
Performance |
| Timeline |
| Ruentex Development |
| Yuanta Daily SP |
Ruentex Development and Yuanta Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and Yuanta Daily
The main advantage of trading using opposite Ruentex Development and Yuanta Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Yuanta Daily 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 Yuanta Daily will offset losses from the drop in Yuanta Daily'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 |
| Yuanta Daily vs. Yuanta Securities Investment | Yuanta Daily vs. Yuanta SP GSCI | Yuanta Daily vs. Yuanta Global NexGen | Yuanta Daily vs. Yuanta SP GSCI |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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