Correlation Between Ruentex Development and Cameo Communications
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Cameo Communications 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 Cameo Communications 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 Cameo Communications, you can compare the effects of market volatilities on Ruentex Development and Cameo Communications 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 Cameo Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Cameo Communications.
Diversification Opportunities for Ruentex Development and Cameo Communications
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ruentex and Cameo is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Cameo Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cameo Communications 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 Cameo Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cameo Communications has no effect on the direction of Ruentex Development i.e., Ruentex Development and Cameo Communications go up and down completely randomly.
Pair Corralation between Ruentex Development and Cameo Communications
Assuming the 90 days trading horizon Ruentex Development is expected to generate 1.85 times less return on investment than Cameo Communications. But when comparing it to its historical volatility, Ruentex Development Co is 1.24 times less risky than Cameo Communications. It trades about 0.02 of its potential returns per unit of risk. Cameo Communications is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,055 in Cameo Communications on September 13, 2024 and sell it today you would earn a total of 145.00 from holding Cameo Communications or generate 13.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ruentex Development Co vs. Cameo Communications
Performance |
| Timeline |
| Ruentex Development |
| Cameo Communications |
Ruentex Development and Cameo Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and Cameo Communications
The main advantage of trading using opposite Ruentex Development and Cameo Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Cameo Communications 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 Cameo Communications will offset losses from the drop in Cameo Communications' 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 |
| Cameo Communications vs. AU Optronics | Cameo Communications vs. Innolux Corp | Cameo Communications vs. Ruentex Development Co | Cameo Communications 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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