Correlation Between Theragen Etex and NewFlex Technology
Can any of the company-specific risk be diversified away by investing in both Theragen Etex and NewFlex Technology 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 Theragen Etex and NewFlex Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Theragen Etex CoLtd and NewFlex Technology Co, you can compare the effects of market volatilities on Theragen Etex and NewFlex Technology 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 Theragen Etex with a short position of NewFlex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Theragen Etex and NewFlex Technology.
Diversification Opportunities for Theragen Etex and NewFlex Technology
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Theragen and NewFlex is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Theragen Etex CoLtd and NewFlex Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFlex Technology and Theragen Etex 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 Theragen Etex CoLtd are associated (or correlated) with NewFlex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFlex Technology has no effect on the direction of Theragen Etex i.e., Theragen Etex and NewFlex Technology go up and down completely randomly.
Pair Corralation between Theragen Etex and NewFlex Technology
Assuming the 90 days trading horizon Theragen Etex CoLtd is expected to under-perform the NewFlex Technology. But the stock apears to be less risky and, when comparing its historical volatility, Theragen Etex CoLtd is 2.88 times less risky than NewFlex Technology. The stock trades about -0.2 of its potential returns per unit of risk. The NewFlex Technology Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 543,000 in NewFlex Technology Co on October 24, 2024 and sell it today you would earn a total of 22,000 from holding NewFlex Technology Co or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Theragen Etex CoLtd vs. NewFlex Technology Co
Performance |
| Timeline |
| Theragen Etex CoLtd |
| NewFlex Technology |
Theragen Etex and NewFlex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Theragen Etex and NewFlex Technology
The main advantage of trading using opposite Theragen Etex and NewFlex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Theragen Etex position performs unexpectedly, NewFlex Technology 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 NewFlex Technology will offset losses from the drop in NewFlex Technology's long position.| Theragen Etex vs. Hanshin Construction Co | Theragen Etex vs. KCC Engineering Construction | Theragen Etex vs. Mobile Appliance | Theragen Etex vs. Seoam Machinery Industry |
| NewFlex Technology vs. DSC Investment | NewFlex Technology vs. Daol Investment Securities | NewFlex Technology vs. DB Financial Investment | NewFlex Technology vs. BGF Retail Co |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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