Correlation Between Tex Cycle and Choo Bee
Can any of the company-specific risk be diversified away by investing in both Tex Cycle and Choo Bee 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 Choo Bee 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 Choo Bee Metal, you can compare the effects of market volatilities on Tex Cycle and Choo Bee 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 Choo Bee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Cycle and Choo Bee.
Diversification Opportunities for Tex Cycle and Choo Bee
Poor diversification
The 3 months correlation between Tex and Choo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Tex Cycle Technology and Choo Bee Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choo Bee Metal 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 Choo Bee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choo Bee Metal has no effect on the direction of Tex Cycle i.e., Tex Cycle and Choo Bee go up and down completely randomly.
Pair Corralation between Tex Cycle and Choo Bee
Assuming the 90 days trading horizon Tex Cycle Technology is expected to generate 0.31 times more return on investment than Choo Bee. However, Tex Cycle Technology is 3.18 times less risky than Choo Bee. It trades about -0.19 of its potential returns per unit of risk. Choo Bee Metal is currently generating about -0.25 per unit of risk. If you would invest 107.00 in Tex Cycle Technology on September 4, 2024 and sell it today you would lose (3.00) from holding Tex Cycle Technology or give up 2.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tex Cycle Technology vs. Choo Bee Metal
Performance |
| Timeline |
| Tex Cycle Technology |
| Choo Bee Metal |
Tex Cycle and Choo Bee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tex Cycle and Choo Bee
The main advantage of trading using opposite Tex Cycle and Choo Bee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tex Cycle position performs unexpectedly, Choo Bee 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 Choo Bee will offset losses from the drop in Choo Bee's long position.| Tex Cycle vs. Minetech Resources Bhd | Tex Cycle vs. Swift Haulage Bhd | Tex Cycle vs. Insas Bhd | Tex Cycle vs. Bina Darulaman Bhd |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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