Correlation Between Ruentex Development and Shan Loong
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Shan Loong 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 Shan Loong 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 Shan Loong Transportation Co, you can compare the effects of market volatilities on Ruentex Development and Shan Loong 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 Shan Loong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Shan Loong.
Diversification Opportunities for Ruentex Development and Shan Loong
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ruentex and Shan is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Shan Loong Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shan Loong Transport 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 Shan Loong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shan Loong Transport has no effect on the direction of Ruentex Development i.e., Ruentex Development and Shan Loong go up and down completely randomly.
Pair Corralation between Ruentex Development and Shan Loong
Assuming the 90 days trading horizon Ruentex Development Co is expected to under-perform the Shan Loong. But the stock apears to be less risky and, when comparing its historical volatility, Ruentex Development Co is 1.04 times less risky than Shan Loong. The stock trades about -0.45 of its potential returns per unit of risk. The Shan Loong Transportation Co is currently generating about -0.28 of returns per unit of risk over similar time horizon. If you would invest 1,800 in Shan Loong Transportation Co on October 14, 2024 and sell it today you would lose (135.00) from holding Shan Loong Transportation Co or give up 7.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ruentex Development Co vs. Shan Loong Transportation Co
Performance |
| Timeline |
| Ruentex Development |
| Shan Loong Transport |
Ruentex Development and Shan Loong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and Shan Loong
The main advantage of trading using opposite Ruentex Development and Shan Loong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Shan Loong 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 Shan Loong will offset losses from the drop in Shan Loong'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 |
| Shan Loong vs. Ruentex Development Co | Shan Loong vs. WiseChip Semiconductor | Shan Loong vs. Leader Electronics | Shan Loong 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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