Correlation Between Ruentex Development and Chi Sheng
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Chi Sheng 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 Chi Sheng 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 Chi Sheng Chemical, you can compare the effects of market volatilities on Ruentex Development and Chi Sheng 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 Chi Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Chi Sheng.
Diversification Opportunities for Ruentex Development and Chi Sheng
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ruentex and Chi is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Chi Sheng Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chi Sheng Chemical 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 Chi Sheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chi Sheng Chemical has no effect on the direction of Ruentex Development i.e., Ruentex Development and Chi Sheng go up and down completely randomly.
Pair Corralation between Ruentex Development and Chi Sheng
Assuming the 90 days trading horizon Ruentex Development Co is expected to generate 1.45 times more return on investment than Chi Sheng. However, Ruentex Development is 1.45 times more volatile than Chi Sheng Chemical. It trades about 0.06 of its potential returns per unit of risk. Chi Sheng Chemical is currently generating about 0.01 per unit of risk. If you would invest 3,365 in Ruentex Development Co on September 12, 2024 and sell it today you would earn a total of 1,215 from holding Ruentex Development Co or generate 36.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ruentex Development Co vs. Chi Sheng Chemical
Performance |
| Timeline |
| Ruentex Development |
| Chi Sheng Chemical |
Ruentex Development and Chi Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and Chi Sheng
The main advantage of trading using opposite Ruentex Development and Chi Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Chi Sheng 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 Chi Sheng will offset losses from the drop in Chi Sheng'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 |
| Chi Sheng vs. SciVision Biotech | Chi Sheng vs. Ruentex Development Co | Chi Sheng vs. WiseChip Semiconductor | Chi Sheng vs. Novatek Microelectronics 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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