Correlation Between Ruentex Development and Lelon Electronics
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Lelon Electronics 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 Lelon Electronics 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 Lelon Electronics Corp, you can compare the effects of market volatilities on Ruentex Development and Lelon Electronics 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 Lelon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Lelon Electronics.
Diversification Opportunities for Ruentex Development and Lelon Electronics
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ruentex and Lelon is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Lelon Electronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lelon Electronics Corp 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 Lelon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lelon Electronics Corp has no effect on the direction of Ruentex Development i.e., Ruentex Development and Lelon Electronics go up and down completely randomly.
Pair Corralation between Ruentex Development and Lelon Electronics
Assuming the 90 days trading horizon Ruentex Development Co is expected to under-perform the Lelon Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Ruentex Development Co is 2.83 times less risky than Lelon Electronics. The stock trades about -0.16 of its potential returns per unit of risk. The Lelon Electronics Corp is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 7,390 in Lelon Electronics Corp on September 13, 2024 and sell it today you would earn a total of 1,130 from holding Lelon Electronics Corp or generate 15.29% 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. Lelon Electronics Corp
Performance |
| Timeline |
| Ruentex Development |
| Lelon Electronics Corp |
Ruentex Development and Lelon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and Lelon Electronics
The main advantage of trading using opposite Ruentex Development and Lelon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Lelon Electronics 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 Lelon Electronics will offset losses from the drop in Lelon Electronics' 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 |
| Lelon Electronics vs. AU Optronics | Lelon Electronics vs. Innolux Corp | Lelon Electronics vs. Ruentex Development Co | Lelon Electronics 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |