Correlation Between Ruentex Engineering and Aker Technology

Can any of the company-specific risk be diversified away by investing in both Ruentex Engineering and Aker 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 Engineering and Aker Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ruentex Engineering Construction and Aker Technology Co, you can compare the effects of market volatilities on Ruentex Engineering and Aker 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 Engineering with a short position of Aker Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Engineering and Aker Technology.

Diversification Opportunities for Ruentex Engineering and Aker Technology

0.57

Correlation Coefficient

Ruentex Engineering  Aker Technology

Very weak diversification

The 3 months correlation between Ruentex and Aker is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Engineering Constructi and Aker Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker Technology and Ruentex Engineering 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 Engineering Construction are associated (or correlated) with Aker Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Technology has no effect on the direction of Ruentex Engineering i.e., Ruentex Engineering and Aker Technology go up and down completely randomly.

Pair Corralation between Ruentex Engineering and Aker Technology

Assuming the 90 days trading horizon Ruentex Engineering Construction is expected to generate 0.55 times more return on investment than Aker Technology. However, Ruentex Engineering Construction is 1.83 times less risky than Aker Technology. It trades about 0.08 of its potential returns per unit of risk. Aker Technology Co is currently generating about -0.11 per unit of risk. If you would invest  14,800  in Ruentex Engineering Construction on October 9, 2024 and sell it today you would earn a total of  400.00  from holding Ruentex Engineering Construction or generate 2.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Ruentex Engineering Constructi  vs.  Aker Technology Co

Ruentex Engineering

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ruentex Engineering Construction are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Ruentex Engineering may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Aker Technology

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aker Technology Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Aker Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ruentex Engineering and Aker Technology

The main advantage of trading using opposite Ruentex Engineering and Aker Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Engineering position performs unexpectedly, Aker 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 Aker Technology will offset losses from the drop in Aker Technology's long position.

The idea behind Ruentex Engineering Construction and Aker Technology Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.