Correlation Between Tex Cycle and ES Ceramics
Can any of the company-specific risk be diversified away by investing in both Tex Cycle and ES Ceramics 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 Tex Cycle and ES Ceramics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tex Cycle Technology and ES Ceramics Technology, you can compare the effects of market volatilities on Tex Cycle and ES Ceramics 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 Tex Cycle with a short position of ES Ceramics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Cycle and ES Ceramics.
Diversification Opportunities for Tex Cycle and ES Ceramics
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tex and 0100 is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Tex Cycle Technology and ES Ceramics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ES Ceramics Technology and Tex Cycle 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 Tex Cycle Technology are associated (or correlated) with ES Ceramics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ES Ceramics Technology has no effect on the direction of Tex Cycle i.e., Tex Cycle and ES Ceramics go up and down completely randomly.
Pair Corralation between Tex Cycle and ES Ceramics
Assuming the 90 days trading horizon Tex Cycle is expected to generate 7.25 times less return on investment than ES Ceramics. But when comparing it to its historical volatility, Tex Cycle Technology is 2.68 times less risky than ES Ceramics. It trades about 0.01 of its potential returns per unit of risk. ES Ceramics Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 15.00 in ES Ceramics Technology on October 24, 2024 and sell it today you would earn a total of 0.00 from holding ES Ceramics Technology or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tex Cycle Technology vs. ES Ceramics Technology
Performance |
| Timeline |
| Tex Cycle Technology |
| ES Ceramics Technology |
Tex Cycle and ES Ceramics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tex Cycle and ES Ceramics
The main advantage of trading using opposite Tex Cycle and ES Ceramics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tex Cycle position performs unexpectedly, ES Ceramics 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 ES Ceramics will offset losses from the drop in ES Ceramics' long position.| Tex Cycle vs. Cengild Medical Berhad | Tex Cycle vs. Sunway Construction Group | Tex Cycle vs. Petronas Chemicals Group | Tex Cycle vs. Resintech Bhd |
| ES Ceramics vs. YX Precious Metals | ES Ceramics vs. Press Metal Bhd | ES Ceramics vs. Uchi Technologies Bhd | ES Ceramics vs. Tex Cycle Technology |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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