Correlation Between Ruentex Development and GeoVision
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and GeoVision 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 GeoVision 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 GeoVision, you can compare the effects of market volatilities on Ruentex Development and GeoVision 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 GeoVision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and GeoVision.
Diversification Opportunities for Ruentex Development and GeoVision
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ruentex and GeoVision is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and GeoVision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeoVision 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 GeoVision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GeoVision has no effect on the direction of Ruentex Development i.e., Ruentex Development and GeoVision go up and down completely randomly.
Pair Corralation between Ruentex Development and GeoVision
Assuming the 90 days trading horizon Ruentex Development is expected to generate 3.67 times less return on investment than GeoVision. But when comparing it to its historical volatility, Ruentex Development Co is 1.45 times less risky than GeoVision. It trades about 0.02 of its potential returns per unit of risk. GeoVision is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,100 in GeoVision on September 13, 2024 and sell it today you would earn a total of 1,620 from holding GeoVision or generate 39.51% 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. GeoVision
Performance |
| Timeline |
| Ruentex Development |
| GeoVision |
Ruentex Development and GeoVision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and GeoVision
The main advantage of trading using opposite Ruentex Development and GeoVision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, GeoVision 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 GeoVision will offset losses from the drop in GeoVision'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 |
| GeoVision vs. AU Optronics | GeoVision vs. Innolux Corp | GeoVision vs. Ruentex Development Co | GeoVision 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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