Correlation Between Ruentex Development and ASE Industrial
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and ASE Industrial 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 ASE Industrial 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 ASE Industrial Holding, you can compare the effects of market volatilities on Ruentex Development and ASE Industrial 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 ASE Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and ASE Industrial.
Diversification Opportunities for Ruentex Development and ASE Industrial
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ruentex and ASE is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and ASE Industrial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASE Industrial Holding 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 ASE Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASE Industrial Holding has no effect on the direction of Ruentex Development i.e., Ruentex Development and ASE Industrial go up and down completely randomly.
Pair Corralation between Ruentex Development and ASE Industrial
Assuming the 90 days trading horizon Ruentex Development is expected to generate 1.34 times less return on investment than ASE Industrial. But when comparing it to its historical volatility, Ruentex Development Co is 1.17 times less risky than ASE Industrial. It trades about 0.05 of its potential returns per unit of risk. ASE Industrial Holding is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 11,350 in ASE Industrial Holding on September 12, 2024 and sell it today you would earn a total of 4,450 from holding ASE Industrial Holding or generate 39.21% 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. ASE Industrial Holding
Performance |
| Timeline |
| Ruentex Development |
| ASE Industrial Holding |
Ruentex Development and ASE Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and ASE Industrial
The main advantage of trading using opposite Ruentex Development and ASE Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, ASE Industrial 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 ASE Industrial will offset losses from the drop in ASE Industrial's long position.| Ruentex Development vs. Chong Hong Construction | Ruentex Development vs. Symtek Automation Asia | Ruentex Development vs. WiseChip Semiconductor | Ruentex Development vs. Novatek Microelectronics Corp |
| ASE Industrial vs. AU Optronics | ASE Industrial vs. Innolux Corp | ASE Industrial vs. Ruentex Development Co | ASE Industrial 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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