Correlation Between Tex Ray and Tainan Spinning
Can any of the company-specific risk be diversified away by investing in both Tex Ray and Tainan Spinning 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 Ray and Tainan Spinning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tex Ray Industrial Co and Tainan Spinning Co, you can compare the effects of market volatilities on Tex Ray and Tainan Spinning 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 Ray with a short position of Tainan Spinning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Ray and Tainan Spinning.
Diversification Opportunities for Tex Ray and Tainan Spinning
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tex and Tainan is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Tex Ray Industrial Co and Tainan Spinning Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainan Spinning and Tex Ray 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 Ray Industrial Co are associated (or correlated) with Tainan Spinning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainan Spinning has no effect on the direction of Tex Ray i.e., Tex Ray and Tainan Spinning go up and down completely randomly.
Pair Corralation between Tex Ray and Tainan Spinning
Assuming the 90 days trading horizon Tex Ray Industrial Co is expected to under-perform the Tainan Spinning. But the stock apears to be less risky and, when comparing its historical volatility, Tex Ray Industrial Co is 1.35 times less risky than Tainan Spinning. The stock trades about -0.03 of its potential returns per unit of risk. The Tainan Spinning Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,555 in Tainan Spinning Co on September 12, 2024 and sell it today you would lose (25.00) from holding Tainan Spinning Co or give up 1.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tex Ray Industrial Co vs. Tainan Spinning Co
Performance |
| Timeline |
| Tex Ray Industrial |
| Tainan Spinning |
Tex Ray and Tainan Spinning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tex Ray and Tainan Spinning
The main advantage of trading using opposite Tex Ray and Tainan Spinning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tex Ray position performs unexpectedly, Tainan Spinning 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 Tainan Spinning will offset losses from the drop in Tainan Spinning's long position.| Tex Ray vs. Feng Tay Enterprises | Tex Ray vs. Ruentex Development Co | Tex Ray vs. WiseChip Semiconductor | Tex Ray vs. Novatek Microelectronics Corp |
| Tainan Spinning vs. Lealea Enterprise Co | Tainan Spinning vs. China Petrochemical Development | Tainan Spinning vs. Li Peng Enterprise | Tainan Spinning vs. Oriental Union Chemical |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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