Correlation Between ES Ceramics and Tex Cycle
Can any of the company-specific risk be diversified away by investing in both ES Ceramics and Tex Cycle 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 ES Ceramics and Tex Cycle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ES Ceramics Technology and Tex Cycle Technology, you can compare the effects of market volatilities on ES Ceramics and Tex Cycle 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 ES Ceramics with a short position of Tex Cycle. Check out your portfolio center. Please also check ongoing floating volatility patterns of ES Ceramics and Tex Cycle.
Diversification Opportunities for ES Ceramics and Tex Cycle
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 0100 and Tex is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding ES Ceramics Technology and Tex Cycle Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tex Cycle Technology and ES Ceramics 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 ES Ceramics Technology are associated (or correlated) with Tex Cycle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tex Cycle Technology has no effect on the direction of ES Ceramics i.e., ES Ceramics and Tex Cycle go up and down completely randomly.
Pair Corralation between ES Ceramics and Tex Cycle
Assuming the 90 days trading horizon ES Ceramics Technology is expected to under-perform the Tex Cycle. In addition to that, ES Ceramics is 4.09 times more volatile than Tex Cycle Technology. It trades about -0.14 of its total potential returns per unit of risk. Tex Cycle Technology is currently generating about -0.33 per unit of volatility. 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 | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
ES Ceramics Technology vs. Tex Cycle Technology
Performance |
| Timeline |
| ES Ceramics Technology |
| Tex Cycle Technology |
ES Ceramics and Tex Cycle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ES Ceramics and Tex Cycle
The main advantage of trading using opposite ES Ceramics and Tex Cycle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ES Ceramics position performs unexpectedly, Tex Cycle 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 Tex Cycle will offset losses from the drop in Tex Cycle's long position.| ES Ceramics vs. Apollo Food Holdings | ES Ceramics vs. SSF Home Group | ES Ceramics vs. Kossan Rubber Industries | ES Ceramics vs. Steel Hawk Berhad |
| Tex Cycle vs. Kluang Rubber | Tex Cycle vs. Berjaya Food Bhd | Tex Cycle vs. CB Industrial Product | Tex Cycle vs. Kossan Rubber Industries |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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