Correlation Between Chia Her and Tex Ray
Can any of the company-specific risk be diversified away by investing in both Chia Her 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 Chia Her and Tex Ray into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia Her Industrial and Tex Ray Industrial Co, you can compare the effects of market volatilities on Chia Her 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 Chia Her with a short position of Tex Ray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Her and Tex Ray.
Diversification Opportunities for Chia Her and Tex Ray
Very weak diversification
The 3 months correlation between Chia and Tex is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Chia Her Industrial 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 Chia Her 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 Chia Her Industrial 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 Chia Her i.e., Chia Her and Tex Ray go up and down completely randomly.
Pair Corralation between Chia Her and Tex Ray
Assuming the 90 days trading horizon Chia Her Industrial is expected to generate 2.39 times more return on investment than Tex Ray. However, Chia Her is 2.39 times more volatile than Tex Ray Industrial Co. It trades about 0.04 of its potential returns per unit of risk. Tex Ray Industrial Co is currently generating about 0.0 per unit of risk. If you would invest 2,000 in Chia Her Industrial on September 4, 2024 and sell it today you would earn a total of 400.00 from holding Chia Her Industrial or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.62% |
| Values | Daily Returns |
Chia Her Industrial vs. Tex Ray Industrial Co
Performance |
| Timeline |
| Chia Her Industrial |
| Tex Ray Industrial |
Chia Her and Tex Ray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Her and Tex Ray
The main advantage of trading using opposite Chia Her and Tex Ray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Her 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.| Chia Her vs. Carnival Industrial Corp | Chia Her vs. I Hwa Industrial Co | Chia Her vs. Hung Chou Fiber | Chia Her vs. Tung Ho Textile |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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