Correlation Between Ruentex Development and Goldsun Building
Can any of the company-specific risk be diversified away by investing in both Ruentex Development and Goldsun Building 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 Goldsun Building 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 Goldsun Building Materials, you can compare the effects of market volatilities on Ruentex Development and Goldsun Building 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 Goldsun Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Goldsun Building.
Diversification Opportunities for Ruentex Development and Goldsun Building
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ruentex and Goldsun is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Goldsun Building Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldsun Building Mat 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 Goldsun Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldsun Building Mat has no effect on the direction of Ruentex Development i.e., Ruentex Development and Goldsun Building go up and down completely randomly.
Pair Corralation between Ruentex Development and Goldsun Building
Assuming the 90 days trading horizon Ruentex Development Co is expected to generate 0.58 times more return on investment than Goldsun Building. However, Ruentex Development Co is 1.72 times less risky than Goldsun Building. It trades about -0.02 of its potential returns per unit of risk. Goldsun Building Materials is currently generating about -0.01 per unit of risk. If you would invest 4,695 in Ruentex Development Co on September 13, 2024 and sell it today you would lose (75.00) from holding Ruentex Development Co or give up 1.6% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ruentex Development Co vs. Goldsun Building Materials
Performance |
Timeline |
Ruentex Development |
Goldsun Building Mat |
Ruentex Development and Goldsun Building Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ruentex Development and Goldsun Building
The main advantage of trading using opposite Ruentex Development and Goldsun Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development position performs unexpectedly, Goldsun Building 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 Goldsun Building will offset losses from the drop in Goldsun Building'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 |
Goldsun Building vs. Cathay Real Estate | Goldsun Building vs. Huaku Development Co | Goldsun Building vs. BES Engineering Co | Goldsun Building vs. Prince Housing Development |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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