Correlation Between Ruentex Development and Taiwan Taffeta

Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Taiwan Taffeta 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 Taiwan Taffeta 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 Taiwan Taffeta Fabric, you can compare the effects of market volatilities on Ruentex Development and Taiwan Taffeta 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 Taiwan Taffeta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Taiwan Taffeta.

Diversification Opportunities for Ruentex Development and Taiwan Taffeta

-0.61

Correlation Coefficient

Ruentex Development  Taiwan Taffeta

Excellent diversification

The 3 months correlation between Ruentex and Taiwan is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Taiwan Taffeta Fabric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Taffeta Fabric 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 Taiwan Taffeta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Taffeta Fabric has no effect on the direction of Ruentex Development i.e., Ruentex Development and Taiwan Taffeta go up and down completely randomly.

Pair Corralation between Ruentex Development and Taiwan Taffeta

Assuming the 90 days trading horizon Ruentex Development Co is expected to under-perform the Taiwan Taffeta. But the stock apears to be less risky and, when comparing its historical volatility, Ruentex Development Co is 1.15 times less risky than Taiwan Taffeta. The stock trades about -0.18 of its potential returns per unit of risk. The Taiwan Taffeta Fabric is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,500  in Taiwan Taffeta Fabric on December 30, 2024 and sell it today you would earn a total of  180.00  from holding Taiwan Taffeta Fabric or generate 12.0% return on investment over 90 days.

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

Ruentex Development Co  vs.  Taiwan Taffeta Fabric

Ruentex Development

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ruentex Development Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Taiwan Taffeta Fabric

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Taiwan Taffeta Fabric are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Taiwan Taffeta showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ruentex Development and Taiwan Taffeta

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

The idea behind Ruentex Development Co and Taiwan Taffeta Fabric 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.