Correlation Between Ruentex Development and Double Bond
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Double Bond 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 Double Bond 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 Double Bond Chemical, you can compare the effects of market volatilities on Ruentex Development and Double Bond 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 Double Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Double Bond.
Diversification Opportunities for Ruentex Development and Double Bond
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ruentex and Double is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Double Bond Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Double Bond 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 Double Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Double Bond Chemical has no effect on the direction of Ruentex Development i.e., Ruentex Development and Double Bond go up and down completely randomly.
Pair Corralation between Ruentex Development and Double Bond
Assuming the 90 days trading horizon Ruentex Development Co is expected to generate 1.31 times more return on investment than Double Bond. However, Ruentex Development is 1.31 times more volatile than Double Bond Chemical. It trades about 0.06 of its potential returns per unit of risk. Double Bond Chemical is currently generating about 0.03 per unit of risk. If you would invest 3,580 in Ruentex Development Co on August 26, 2024 and sell it today you would earn a total of 1,040 from holding Ruentex Development Co or generate 29.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ruentex Development Co vs. Double Bond Chemical
Performance |
| Timeline |
| Ruentex Development |
| Double Bond Chemical |
Ruentex Development and Double Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and Double Bond
The main advantage of trading using opposite Ruentex Development and Double Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Double Bond 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 Double Bond will offset losses from the drop in Double Bond'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 |
| Double Bond vs. Delta Electronics | Double Bond vs. China Steel Chemical | Double Bond vs. Hota Industrial Mfg | Double Bond vs. Ruentex Development Co |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |