Correlation Between Ruentex Development and Acelon Chemicals
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Acelon Chemicals 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 Acelon Chemicals 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 Acelon Chemicals Fiber, you can compare the effects of market volatilities on Ruentex Development and Acelon Chemicals 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 Acelon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Acelon Chemicals.
Diversification Opportunities for Ruentex Development and Acelon Chemicals
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ruentex and Acelon is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Acelon Chemicals Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acelon Chemicals Fiber 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 Acelon Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acelon Chemicals Fiber has no effect on the direction of Ruentex Development i.e., Ruentex Development and Acelon Chemicals go up and down completely randomly.
Pair Corralation between Ruentex Development and Acelon Chemicals
Assuming the 90 days trading horizon Ruentex Development Co is expected to under-perform the Acelon Chemicals. But the stock apears to be less risky and, when comparing its historical volatility, Ruentex Development Co is 1.5 times less risky than Acelon Chemicals. The stock trades about -0.09 of its potential returns per unit of risk. The Acelon Chemicals Fiber is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,375 in Acelon Chemicals Fiber on December 2, 2024 and sell it today you would lose (20.00) from holding Acelon Chemicals Fiber or give up 1.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Ruentex Development Co vs. Acelon Chemicals Fiber
Performance |
Timeline |
Ruentex Development |
Acelon Chemicals Fiber |
Ruentex Development and Acelon Chemicals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ruentex Development and Acelon Chemicals
The main advantage of trading using opposite Ruentex Development and Acelon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Acelon Chemicals 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 Acelon Chemicals will offset losses from the drop in Acelon Chemicals' 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 |
Acelon Chemicals vs. Honmyue Enterprise Co | Acelon Chemicals vs. Chia Her Industrial | Acelon Chemicals vs. Zig Sheng Industrial | Acelon Chemicals vs. Li Peng Enterprise |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |