Correlation Between Ruentex Development and Taiwan Sakura
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Taiwan Sakura 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 Sakura 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 Sakura Corp, you can compare the effects of market volatilities on Ruentex Development and Taiwan Sakura 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 Sakura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Taiwan Sakura.
Diversification Opportunities for Ruentex Development and Taiwan Sakura
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ruentex and Taiwan is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Taiwan Sakura Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Sakura Corp 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 Sakura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Sakura Corp has no effect on the direction of Ruentex Development i.e., Ruentex Development and Taiwan Sakura go up and down completely randomly.
Pair Corralation between Ruentex Development and Taiwan Sakura
Assuming the 90 days trading horizon Ruentex Development Co is expected to under-perform the Taiwan Sakura. In addition to that, Ruentex Development is 1.9 times more volatile than Taiwan Sakura Corp. It trades about -0.11 of its total potential returns per unit of risk. Taiwan Sakura Corp is currently generating about 0.09 per unit of volatility. If you would invest 8,510 in Taiwan Sakura Corp on December 4, 2024 and sell it today you would earn a total of 250.00 from holding Taiwan Sakura Corp or generate 2.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ruentex Development Co vs. Taiwan Sakura Corp
Performance |
Timeline |
Ruentex Development |
Taiwan Sakura Corp |
Ruentex Development and Taiwan Sakura Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ruentex Development and Taiwan Sakura
The main advantage of trading using opposite Ruentex Development and Taiwan Sakura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Taiwan Sakura 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 Sakura will offset losses from the drop in Taiwan Sakura's 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 |
Taiwan Sakura vs. Yulon Finance Corp | Taiwan Sakura vs. Taiwan Secom Co | Taiwan Sakura vs. Pou Chen Corp | Taiwan Sakura vs. Taiwan Hon Chuan |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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