Correlation Between Ruentex Development and Yulon Nissan
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Yulon Nissan 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 Yulon Nissan 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 Yulon Nissan Motor, you can compare the effects of market volatilities on Ruentex Development and Yulon Nissan 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 Yulon Nissan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Yulon Nissan.
Diversification Opportunities for Ruentex Development and Yulon Nissan
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ruentex and Yulon is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Yulon Nissan Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yulon Nissan Motor 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 Yulon Nissan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yulon Nissan Motor has no effect on the direction of Ruentex Development i.e., Ruentex Development and Yulon Nissan go up and down completely randomly.
Pair Corralation between Ruentex Development and Yulon Nissan
Assuming the 90 days trading horizon Ruentex Development Co is expected to generate 1.1 times more return on investment than Yulon Nissan. However, Ruentex Development is 1.1 times more volatile than Yulon Nissan Motor. It trades about 0.05 of its potential returns per unit of risk. Yulon Nissan Motor is currently generating about -0.16 per unit of risk. If you would invest 3,700 in Ruentex Development Co on September 12, 2024 and sell it today you would earn a total of 880.00 from holding Ruentex Development Co or generate 23.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ruentex Development Co vs. Yulon Nissan Motor
Performance |
| Timeline |
| Ruentex Development |
| Yulon Nissan Motor |
Ruentex Development and Yulon Nissan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and Yulon Nissan
The main advantage of trading using opposite Ruentex Development and Yulon Nissan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Yulon Nissan 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 Yulon Nissan will offset losses from the drop in Yulon Nissan's long position.| Ruentex Development vs. Chong Hong Construction | Ruentex Development vs. Symtek Automation Asia | Ruentex Development vs. WiseChip Semiconductor | Ruentex Development vs. Novatek Microelectronics Corp |
| Yulon Nissan vs. Feng Tay Enterprises | Yulon Nissan vs. Ruentex Development Co | Yulon Nissan vs. WiseChip Semiconductor | Yulon Nissan vs. Novatek Microelectronics 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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