Correlation Between Ruentex Materials and Daxin Materials
Can any of the company-specific risk be diversified away by investing in both Ruentex Materials and Daxin Materials 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 Materials and Daxin Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ruentex Materials Co and Daxin Materials Corp, you can compare the effects of market volatilities on Ruentex Materials and Daxin Materials 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 Materials with a short position of Daxin Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Materials and Daxin Materials.
Diversification Opportunities for Ruentex Materials and Daxin Materials
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ruentex and Daxin is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Materials Co and Daxin Materials Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daxin Materials Corp and Ruentex Materials 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 Materials Co are associated (or correlated) with Daxin Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daxin Materials Corp has no effect on the direction of Ruentex Materials i.e., Ruentex Materials and Daxin Materials go up and down completely randomly.
Pair Corralation between Ruentex Materials and Daxin Materials
Assuming the 90 days trading horizon Ruentex Materials Co is expected to generate 0.24 times more return on investment than Daxin Materials. However, Ruentex Materials Co is 4.16 times less risky than Daxin Materials. It trades about -0.04 of its potential returns per unit of risk. Daxin Materials Corp is currently generating about -0.15 per unit of risk. If you would invest 2,650 in Ruentex Materials Co on September 14, 2024 and sell it today you would lose (20.00) from holding Ruentex Materials Co or give up 0.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ruentex Materials Co vs. Daxin Materials Corp
Performance |
Timeline |
Ruentex Materials |
Daxin Materials Corp |
Ruentex Materials and Daxin Materials Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ruentex Materials and Daxin Materials
The main advantage of trading using opposite Ruentex Materials and Daxin Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Materials position performs unexpectedly, Daxin Materials 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 Daxin Materials will offset losses from the drop in Daxin Materials' long position.Ruentex Materials vs. Taiwan Cement Corp | Ruentex Materials vs. Goldsun Building Materials | Ruentex Materials vs. Huang Hsiang Construction | Ruentex Materials vs. Chia Hsin Cement |
Daxin Materials vs. Tainan Spinning Co | Daxin Materials vs. Lealea Enterprise Co | Daxin Materials vs. China Petrochemical Development | Daxin Materials vs. Ruentex Development Co |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |