Correlation Between Ruentex Development and Tai Tung
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Tai Tung 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 Tai Tung 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 Tai Tung Communication, you can compare the effects of market volatilities on Ruentex Development and Tai Tung 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 Tai Tung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Tai Tung.
Diversification Opportunities for Ruentex Development and Tai Tung
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ruentex and Tai is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Tai Tung Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tai Tung Communication 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 Tai Tung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tai Tung Communication has no effect on the direction of Ruentex Development i.e., Ruentex Development and Tai Tung go up and down completely randomly.
Pair Corralation between Ruentex Development and Tai Tung
Assuming the 90 days trading horizon Ruentex Development Co is expected to generate 0.64 times more return on investment than Tai Tung. However, Ruentex Development Co is 1.55 times less risky than Tai Tung. It trades about 0.04 of its potential returns per unit of risk. Tai Tung Communication is currently generating about 0.0 per unit of risk. If you would invest 3,585 in Ruentex Development Co on December 2, 2024 and sell it today you would earn a total of 665.00 from holding Ruentex Development Co or generate 18.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ruentex Development Co vs. Tai Tung Communication
Performance |
| Timeline |
| Ruentex Development |
| Tai Tung Communication |
Ruentex Development and Tai Tung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and Tai Tung
The main advantage of trading using opposite Ruentex Development and Tai Tung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Tai Tung 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 Tai Tung will offset losses from the drop in Tai Tung'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 |
| Tai Tung vs. Zinwell | Tai Tung vs. Mercuries Life Insurance | Tai Tung vs. Darwin Precisions Corp | Tai Tung vs. Jinli Group Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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