Correlation Between Ruentex Development and Hwa Fong
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Hwa Fong 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 Hwa Fong 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 Hwa Fong Rubber, you can compare the effects of market volatilities on Ruentex Development and Hwa Fong 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 Hwa Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Hwa Fong.
Diversification Opportunities for Ruentex Development and Hwa Fong
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ruentex and Hwa is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Hwa Fong Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwa Fong Rubber 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 Hwa Fong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwa Fong Rubber has no effect on the direction of Ruentex Development i.e., Ruentex Development and Hwa Fong go up and down completely randomly.
Pair Corralation between Ruentex Development and Hwa Fong
Assuming the 90 days trading horizon Ruentex Development Co is expected to under-perform the Hwa Fong. In addition to that, Ruentex Development is 1.47 times more volatile than Hwa Fong Rubber. It trades about -0.05 of its total potential returns per unit of risk. Hwa Fong Rubber is currently generating about -0.07 per unit of volatility. If you would invest 1,895 in Hwa Fong Rubber on September 15, 2024 and sell it today you would lose (70.00) from holding Hwa Fong Rubber or give up 3.69% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ruentex Development Co vs. Hwa Fong Rubber
Performance |
Timeline |
Ruentex Development |
Hwa Fong Rubber |
Ruentex Development and Hwa Fong Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ruentex Development and Hwa Fong
The main advantage of trading using opposite Ruentex Development and Hwa Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Hwa Fong 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 Hwa Fong will offset losses from the drop in Hwa Fong'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 |
Hwa Fong vs. Feng Tay Enterprises | Hwa Fong vs. Ruentex Development Co | Hwa Fong vs. WiseChip Semiconductor | Hwa Fong vs. Novatek Microelectronics Corp |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Transaction History View history of all your transactions and understand their impact on performance | |
Stocks Directory Find actively traded stocks across global markets | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |