Correlation Between Ruentex Development and WinMate Communication
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and WinMate Communication 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 WinMate Communication 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 WinMate Communication INC, you can compare the effects of market volatilities on Ruentex Development and WinMate Communication 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 WinMate Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and WinMate Communication.
Diversification Opportunities for Ruentex Development and WinMate Communication
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ruentex and WinMate is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and WinMate Communication INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WinMate Communication INC 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 WinMate Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WinMate Communication INC has no effect on the direction of Ruentex Development i.e., Ruentex Development and WinMate Communication go up and down completely randomly.
Pair Corralation between Ruentex Development and WinMate Communication
Assuming the 90 days trading horizon Ruentex Development Co is expected to under-perform the WinMate Communication. But the stock apears to be less risky and, when comparing its historical volatility, Ruentex Development Co is 1.33 times less risky than WinMate Communication. The stock trades about -0.02 of its potential returns per unit of risk. The WinMate Communication INC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14,950 in WinMate Communication INC on September 12, 2024 and sell it today you would earn a total of 250.00 from holding WinMate Communication INC or generate 1.67% 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. WinMate Communication INC
Performance |
| Timeline |
| Ruentex Development |
| WinMate Communication INC |
Ruentex Development and WinMate Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and WinMate Communication
The main advantage of trading using opposite Ruentex Development and WinMate Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, WinMate Communication 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 WinMate Communication will offset losses from the drop in WinMate Communication'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 |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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