Correlation Between Ruentex Development and Sino American
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Sino American 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 Sino American 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 Sino American Silicon Products, you can compare the effects of market volatilities on Ruentex Development and Sino American 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 Sino American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Sino American.
Diversification Opportunities for Ruentex Development and Sino American
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ruentex and Sino is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Sino American Silicon Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino American Silicon 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 Sino American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino American Silicon has no effect on the direction of Ruentex Development i.e., Ruentex Development and Sino American go up and down completely randomly.
Pair Corralation between Ruentex Development and Sino American
Assuming the 90 days trading horizon Ruentex Development Co is expected to generate 0.93 times more return on investment than Sino American. However, Ruentex Development Co is 1.08 times less risky than Sino American. It trades about -0.16 of its potential returns per unit of risk. Sino American Silicon Products is currently generating about -0.2 per unit of risk. If you would invest 4,750 in Ruentex Development Co on September 13, 2024 and sell it today you would lose (175.00) from holding Ruentex Development Co or give up 3.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ruentex Development Co vs. Sino American Silicon Products
Performance |
| Timeline |
| Ruentex Development |
| Sino American Silicon |
Ruentex Development and Sino American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and Sino American
The main advantage of trading using opposite Ruentex Development and Sino American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Sino American 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 Sino American will offset losses from the drop in Sino American'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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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