Correlation Between Ruentex Development and Asustek Computer
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Asustek Computer 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 Asustek Computer 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 Asustek Computer, you can compare the effects of market volatilities on Ruentex Development and Asustek Computer 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 Asustek Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Asustek Computer.
Diversification Opportunities for Ruentex Development and Asustek Computer
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ruentex and Asustek is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Asustek Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asustek Computer 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 Asustek Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asustek Computer has no effect on the direction of Ruentex Development i.e., Ruentex Development and Asustek Computer go up and down completely randomly.
Pair Corralation between Ruentex Development and Asustek Computer
Assuming the 90 days trading horizon Ruentex Development is expected to generate 5.66 times less return on investment than Asustek Computer. But when comparing it to its historical volatility, Ruentex Development Co is 1.17 times less risky than Asustek Computer. It trades about 0.02 of its potential returns per unit of risk. Asustek Computer is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 48,900 in Asustek Computer on September 13, 2024 and sell it today you would earn a total of 11,500 from holding Asustek Computer or generate 23.52% 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. Asustek Computer
Performance |
| Timeline |
| Ruentex Development |
| Asustek Computer |
Ruentex Development and Asustek Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and Asustek Computer
The main advantage of trading using opposite Ruentex Development and Asustek Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Asustek Computer 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 Asustek Computer will offset losses from the drop in Asustek Computer'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 |
| Asustek Computer vs. AU Optronics | Asustek Computer vs. Innolux Corp | Asustek Computer vs. Ruentex Development Co | Asustek Computer vs. WiseChip Semiconductor |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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