Correlation Between Tex Cycle and Magni Tech
Can any of the company-specific risk be diversified away by investing in both Tex Cycle and Magni Tech 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 Magni Tech 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 Magni Tech Industries, you can compare the effects of market volatilities on Tex Cycle and Magni Tech 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 Magni Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Cycle and Magni Tech.
Diversification Opportunities for Tex Cycle and Magni Tech
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tex and Magni is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Tex Cycle Technology and Magni Tech Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magni Tech Industries 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 Magni Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magni Tech Industries has no effect on the direction of Tex Cycle i.e., Tex Cycle and Magni Tech go up and down completely randomly.
Pair Corralation between Tex Cycle and Magni Tech
Assuming the 90 days trading horizon Tex Cycle Technology is expected to under-perform the Magni Tech. But the stock apears to be less risky and, when comparing its historical volatility, Tex Cycle Technology is 1.04 times less risky than Magni Tech. The stock trades about -0.36 of its potential returns per unit of risk. The Magni Tech Industries is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest 254.00 in Magni Tech Industries on October 30, 2024 and sell it today you would lose (12.00) from holding Magni Tech Industries or give up 4.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tex Cycle Technology vs. Magni Tech Industries
Performance |
| Timeline |
| Tex Cycle Technology |
| Magni Tech Industries |
Tex Cycle and Magni Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tex Cycle and Magni Tech
The main advantage of trading using opposite Tex Cycle and Magni Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tex Cycle position performs unexpectedly, Magni Tech 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 Magni Tech will offset losses from the drop in Magni Tech's long position.| Tex Cycle vs. Dnonce Tech Bhd | Tex Cycle vs. Computer Forms Bhd | Tex Cycle vs. MI Technovation Bhd | Tex Cycle vs. Magni Tech Industries |
| Magni Tech vs. Central Industrial Corp | Magni Tech vs. Choo Bee Metal | Magni Tech vs. Homeritz Bhd | Magni Tech vs. Impiana Hotels 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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