Correlation Between Ruentex Development and Career Technology
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Career Technology 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 Career Technology 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 Career Technology MFG, you can compare the effects of market volatilities on Ruentex Development and Career Technology 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 Career Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Career Technology.
Diversification Opportunities for Ruentex Development and Career Technology
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ruentex and Career is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Career Technology MFG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Career Technology MFG 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 Career Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Career Technology MFG has no effect on the direction of Ruentex Development i.e., Ruentex Development and Career Technology go up and down completely randomly.
Pair Corralation between Ruentex Development and Career Technology
Assuming the 90 days trading horizon Ruentex Development Co is expected to generate 1.04 times more return on investment than Career Technology. However, Ruentex Development is 1.04 times more volatile than Career Technology MFG. It trades about 0.05 of its potential returns per unit of risk. Career Technology MFG is currently generating about -0.05 per unit of risk. If you would invest 3,570 in Ruentex Development Co on September 12, 2024 and sell it today you would earn a total of 1,010 from holding Ruentex Development Co or generate 28.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ruentex Development Co vs. Career Technology MFG
Performance |
| Timeline |
| Ruentex Development |
| Career Technology MFG |
Ruentex Development and Career Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and Career Technology
The main advantage of trading using opposite Ruentex Development and Career Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Career Technology 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 Career Technology will offset losses from the drop in Career Technology'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 |
| Career Technology vs. AU Optronics | Career Technology vs. Innolux Corp | Career Technology vs. Ruentex Development Co | Career Technology 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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