Correlation Between Yuanta Securities and Ruentex Development
Can any of the company-specific risk be diversified away by investing in both Yuanta Securities and Ruentex Development 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 Yuanta Securities and Ruentex Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuanta Securities Investment and Ruentex Development Co, you can compare the effects of market volatilities on Yuanta Securities and Ruentex Development 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 Yuanta Securities with a short position of Ruentex Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Securities and Ruentex Development.
Diversification Opportunities for Yuanta Securities and Ruentex Development
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yuanta and Ruentex is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Securities Investment and Ruentex Development Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ruentex Development and Yuanta Securities 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 Yuanta Securities Investment are associated (or correlated) with Ruentex Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ruentex Development has no effect on the direction of Yuanta Securities i.e., Yuanta Securities and Ruentex Development go up and down completely randomly.
Pair Corralation between Yuanta Securities and Ruentex Development
Assuming the 90 days trading horizon Yuanta Securities Investment is expected to under-perform the Ruentex Development. But the etf apears to be less risky and, when comparing its historical volatility, Yuanta Securities Investment is 1.42 times less risky than Ruentex Development. The etf trades about -0.07 of its potential returns per unit of risk. The Ruentex Development Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 4,685 in Ruentex Development Co on September 6, 2024 and sell it today you would lose (105.00) from holding Ruentex Development Co or give up 2.24% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.41% |
Values | Daily Returns |
Yuanta Securities Investment vs. Ruentex Development Co
Performance |
Timeline |
Yuanta Securities |
Ruentex Development |
Yuanta Securities and Ruentex Development Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Yuanta Securities and Ruentex Development
The main advantage of trading using opposite Yuanta Securities and Ruentex Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Securities position performs unexpectedly, Ruentex Development 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 Ruentex Development will offset losses from the drop in Ruentex Development's long position.Yuanta Securities vs. Yuanta Daily SP | Yuanta Securities vs. Yuanta Securities Investment | Yuanta Securities vs. Yuanta SP GSCI | Yuanta Securities vs. Yuanta Global NexGen |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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