Correlation Between Taiwan Styrene and Tex Ray
Can any of the company-specific risk be diversified away by investing in both Taiwan Styrene and Tex Ray 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 Taiwan Styrene and Tex Ray into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Styrene Monomer and Tex Ray Industrial Co, you can compare the effects of market volatilities on Taiwan Styrene and Tex Ray 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 Taiwan Styrene with a short position of Tex Ray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Styrene and Tex Ray.
Diversification Opportunities for Taiwan Styrene and Tex Ray
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Taiwan and Tex is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Styrene Monomer and Tex Ray Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tex Ray Industrial and Taiwan Styrene 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 Taiwan Styrene Monomer are associated (or correlated) with Tex Ray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tex Ray Industrial has no effect on the direction of Taiwan Styrene i.e., Taiwan Styrene and Tex Ray go up and down completely randomly.
Pair Corralation between Taiwan Styrene and Tex Ray
Assuming the 90 days trading horizon Taiwan Styrene Monomer is expected to under-perform the Tex Ray. But the stock apears to be less risky and, when comparing its historical volatility, Taiwan Styrene Monomer is 1.22 times less risky than Tex Ray. The stock trades about -0.21 of its potential returns per unit of risk. The Tex Ray Industrial Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,055 in Tex Ray Industrial Co on September 1, 2024 and sell it today you would earn a total of 25.00 from holding Tex Ray Industrial Co or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Styrene Monomer vs. Tex Ray Industrial Co
Performance |
| Timeline |
| Taiwan Styrene Monomer |
| Tex Ray Industrial |
Taiwan Styrene and Tex Ray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Styrene and Tex Ray
The main advantage of trading using opposite Taiwan Styrene and Tex Ray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Styrene position performs unexpectedly, Tex Ray 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 Ray will offset losses from the drop in Tex Ray's long position.| Taiwan Styrene vs. Basso Industry Corp | Taiwan Styrene vs. Chung Hsin Electric Machinery | Taiwan Styrene vs. TYC Brother Industrial | Taiwan Styrene vs. TECO Electric Machinery |
| Tex Ray vs. Tainan Enterprises Co | Tex Ray vs. De Licacy Industrial | Tex Ray vs. Nien Hsing Textile | Tex Ray vs. Wisher Industrial 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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