Correlation Between Ruentex Development and Sino Horizon

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Sino Horizon 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 Sino Horizon 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 Sino Horizon Holdings, you can compare the effects of market volatilities on Ruentex Development and Sino Horizon 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 Sino Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Sino Horizon.

Diversification Opportunities for Ruentex Development and Sino Horizon

0.65
  Correlation Coefficient

Poor diversification

The 3 months correlation between Ruentex and Sino is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Sino Horizon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Horizon Holdings 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 Sino Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Horizon Holdings has no effect on the direction of Ruentex Development i.e., Ruentex Development and Sino Horizon go up and down completely randomly.

Pair Corralation between Ruentex Development and Sino Horizon

Assuming the 90 days trading horizon Ruentex Development is expected to generate 1.18 times less return on investment than Sino Horizon. But when comparing it to its historical volatility, Ruentex Development Co is 1.68 times less risky than Sino Horizon. It trades about 0.04 of its potential returns per unit of risk. Sino Horizon Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,410  in Sino Horizon Holdings on September 19, 2024 and sell it today you would earn a total of  405.00  from holding Sino Horizon Holdings or generate 16.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Ruentex Development Co  vs.  Sino Horizon Holdings

 Performance 
       Timeline  
Ruentex Development 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.
Sino Horizon Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sino Horizon Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Ruentex Development and Sino Horizon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ruentex Development and Sino Horizon

The main advantage of trading using opposite Ruentex Development and Sino Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Sino Horizon 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 Sino Horizon will offset losses from the drop in Sino Horizon's long position.
The idea behind Ruentex Development Co and Sino Horizon Holdings 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.
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 Global Correlations module to find global opportunities by holding instruments from different markets.

Other Complementary Tools

Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets