Correlation Between Ruentex Development and Sunfar Computer
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Sunfar Computer 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 Sunfar Computer 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 Sunfar Computer Co, you can compare the effects of market volatilities on Ruentex Development and Sunfar Computer 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 Sunfar Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Sunfar Computer.
Diversification Opportunities for Ruentex Development and Sunfar Computer
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ruentex and Sunfar is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Sunfar Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunfar Computer 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 Sunfar Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunfar Computer has no effect on the direction of Ruentex Development i.e., Ruentex Development and Sunfar Computer go up and down completely randomly.
Pair Corralation between Ruentex Development and Sunfar Computer
Assuming the 90 days trading horizon Ruentex Development Co is expected to generate 2.58 times more return on investment than Sunfar Computer. However, Ruentex Development is 2.58 times more volatile than Sunfar Computer Co. It trades about 0.06 of its potential returns per unit of risk. Sunfar Computer Co is currently generating about 0.01 per unit of risk. If you would invest 3,435 in Ruentex Development Co on September 4, 2024 and sell it today you would earn a total of 1,105 from holding Ruentex Development Co or generate 32.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ruentex Development Co vs. Sunfar Computer Co
Performance |
| Timeline |
| Ruentex Development |
| Sunfar Computer |
Ruentex Development and Sunfar Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and Sunfar Computer
The main advantage of trading using opposite Ruentex Development and Sunfar Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Sunfar Computer 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 Sunfar Computer will offset losses from the drop in Sunfar Computer'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 |
| Sunfar Computer vs. Space Shuttle Hi Tech | Sunfar Computer vs. Ruentex Development Co | Sunfar Computer vs. Symtek Automation Asia | Sunfar Computer vs. CTCI 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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