Correlation Between Ruentex Development and Shin Tai
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Shin Tai 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 Shin Tai 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 Shin Tai Industry, you can compare the effects of market volatilities on Ruentex Development and Shin Tai 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 Shin Tai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Shin Tai.
Diversification Opportunities for Ruentex Development and Shin Tai
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ruentex and Shin is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Shin Tai Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Tai Industry 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 Shin Tai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Tai Industry has no effect on the direction of Ruentex Development i.e., Ruentex Development and Shin Tai go up and down completely randomly.
Pair Corralation between Ruentex Development and Shin Tai
Assuming the 90 days trading horizon Ruentex Development Co is expected to generate 0.44 times more return on investment than Shin Tai. However, Ruentex Development Co is 2.27 times less risky than Shin Tai. It trades about -0.08 of its potential returns per unit of risk. Shin Tai Industry is currently generating about -0.05 per unit of risk. If you would invest 4,705 in Ruentex Development Co on August 25, 2024 and sell it today you would lose (85.00) from holding Ruentex Development Co or give up 1.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ruentex Development Co vs. Shin Tai Industry
Performance |
| Timeline |
| Ruentex Development |
| Shin Tai Industry |
Ruentex Development and Shin Tai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and Shin Tai
The main advantage of trading using opposite Ruentex Development and Shin Tai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Shin Tai 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 Shin Tai will offset losses from the drop in Shin Tai'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 |
| Shin Tai vs. Lian Hwa Foods | Shin Tai vs. Uni President Enterprises Corp | Shin Tai vs. Taiwan Cement Corp | Shin Tai vs. Ruentex Development Co |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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