Correlation Between Ruentex Development and Grape King
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Grape King 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 Grape King 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 Grape King Bio, you can compare the effects of market volatilities on Ruentex Development and Grape King 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 Grape King. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Grape King.
Diversification Opportunities for Ruentex Development and Grape King
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ruentex and Grape is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Grape King Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grape King Bio 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 Grape King. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grape King Bio has no effect on the direction of Ruentex Development i.e., Ruentex Development and Grape King go up and down completely randomly.
Pair Corralation between Ruentex Development and Grape King
Assuming the 90 days trading horizon Ruentex Development Co is expected to under-perform the Grape King. In addition to that, Ruentex Development is 1.23 times more volatile than Grape King Bio. It trades about -0.07 of its total potential returns per unit of risk. Grape King Bio is currently generating about 0.17 per unit of volatility. If you would invest 15,050 in Grape King Bio on August 28, 2024 and sell it today you would earn a total of 450.00 from holding Grape King Bio or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ruentex Development Co vs. Grape King Bio
Performance |
| Timeline |
| Ruentex Development |
| Grape King Bio |
Ruentex Development and Grape King Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and Grape King
The main advantage of trading using opposite Ruentex Development and Grape King positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Grape King 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 Grape King will offset losses from the drop in Grape King'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 |
| Grape King vs. Taiwan Cement Corp | Grape King vs. Ruentex Development Co | Grape King vs. Symtek Automation Asia | Grape King 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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