Correlation Between Ruentex Development and CyberTAN Technology
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and CyberTAN Technology 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 CyberTAN Technology 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 CyberTAN Technology, you can compare the effects of market volatilities on Ruentex Development and CyberTAN Technology 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 CyberTAN Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and CyberTAN Technology.
Diversification Opportunities for Ruentex Development and CyberTAN Technology
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ruentex and CyberTAN is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and CyberTAN Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberTAN Technology 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 CyberTAN Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberTAN Technology has no effect on the direction of Ruentex Development i.e., Ruentex Development and CyberTAN Technology go up and down completely randomly.
Pair Corralation between Ruentex Development and CyberTAN Technology
Assuming the 90 days trading horizon Ruentex Development is expected to generate 3.57 times less return on investment than CyberTAN Technology. But when comparing it to its historical volatility, Ruentex Development Co is 1.42 times less risky than CyberTAN Technology. It trades about 0.02 of its potential returns per unit of risk. CyberTAN Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,380 in CyberTAN Technology on September 14, 2024 and sell it today you would earn a total of 930.00 from holding CyberTAN Technology or generate 39.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ruentex Development Co vs. CyberTAN Technology
Performance |
| Timeline |
| Ruentex Development |
| CyberTAN Technology |
Ruentex Development and CyberTAN Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and CyberTAN Technology
The main advantage of trading using opposite Ruentex Development and CyberTAN Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, CyberTAN Technology 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 CyberTAN Technology will offset losses from the drop in CyberTAN Technology'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 |
| CyberTAN Technology vs. AU Optronics | CyberTAN Technology vs. Innolux Corp | CyberTAN Technology vs. Ruentex Development Co | CyberTAN Technology 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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