Correlation Between Tex Cycle and Kawan Food
Can any of the company-specific risk be diversified away by investing in both Tex Cycle and Kawan Food 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 Kawan Food 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 Kawan Food Bhd, you can compare the effects of market volatilities on Tex Cycle and Kawan Food 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 Kawan Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Cycle and Kawan Food.
Diversification Opportunities for Tex Cycle and Kawan Food
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tex and Kawan is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Tex Cycle Technology and Kawan Food Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kawan Food Bhd 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 Kawan Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kawan Food Bhd has no effect on the direction of Tex Cycle i.e., Tex Cycle and Kawan Food go up and down completely randomly.
Pair Corralation between Tex Cycle and Kawan Food
Assuming the 90 days trading horizon Tex Cycle Technology is expected to generate 1.71 times more return on investment than Kawan Food. However, Tex Cycle is 1.71 times more volatile than Kawan Food Bhd. It trades about 0.07 of its potential returns per unit of risk. Kawan Food Bhd is currently generating about -0.04 per unit of risk. If you would invest 104.00 in Tex Cycle Technology on October 17, 2024 and sell it today you would earn a total of 5.00 from holding Tex Cycle Technology or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tex Cycle Technology vs. Kawan Food Bhd
Performance |
| Timeline |
| Tex Cycle Technology |
| Kawan Food Bhd |
Tex Cycle and Kawan Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tex Cycle and Kawan Food
The main advantage of trading using opposite Tex Cycle and Kawan Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tex Cycle position performs unexpectedly, Kawan Food 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 Kawan Food will offset losses from the drop in Kawan Food's long position.| Tex Cycle vs. Resintech Bhd | Tex Cycle vs. Lyc Healthcare Bhd | Tex Cycle vs. Homeritz Bhd | Tex Cycle vs. Cosmos Technology International |
| Kawan Food vs. Tex Cycle Technology | Kawan Food vs. SFP Tech Holdings | Kawan Food vs. K One Technology Bhd | Kawan Food vs. MI Technovation 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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