Correlation Between Tex Cycle and Computer Forms
Can any of the company-specific risk be diversified away by investing in both Tex Cycle and Computer Forms 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 Computer Forms 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 Computer Forms Bhd, you can compare the effects of market volatilities on Tex Cycle and Computer Forms 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 Computer Forms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Cycle and Computer Forms.
Diversification Opportunities for Tex Cycle and Computer Forms
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tex and Computer is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Tex Cycle Technology and Computer Forms Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Forms 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 Computer Forms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Forms Bhd has no effect on the direction of Tex Cycle i.e., Tex Cycle and Computer Forms go up and down completely randomly.
Pair Corralation between Tex Cycle and Computer Forms
Assuming the 90 days trading horizon Tex Cycle Technology is expected to generate 0.2 times more return on investment than Computer Forms. However, Tex Cycle Technology is 5.05 times less risky than Computer Forms. It trades about -0.33 of its potential returns per unit of risk. Computer Forms Bhd is currently generating about -0.07 per unit of risk. If you would invest 111.00 in Tex Cycle Technology on November 4, 2024 and sell it today you would lose (7.00) from holding Tex Cycle Technology or give up 6.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Tex Cycle Technology vs. Computer Forms Bhd
Performance |
| Timeline |
| Tex Cycle Technology |
| Computer Forms Bhd |
Tex Cycle and Computer Forms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tex Cycle and Computer Forms
The main advantage of trading using opposite Tex Cycle and Computer Forms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tex Cycle position performs unexpectedly, Computer Forms 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 Computer Forms will offset losses from the drop in Computer Forms' long position.| Tex Cycle vs. Kluang Rubber | Tex Cycle vs. Berjaya Food Bhd | Tex Cycle vs. CB Industrial Product | Tex Cycle vs. Kossan Rubber Industries |
| Computer Forms vs. Diversified Gateway Solutions | Computer Forms vs. MClean Technologies Bhd | Computer Forms vs. Sports Toto Berhad | Computer Forms vs. PIE Industrial 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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