Correlation Between Tex Ray and Ta Jiang
Can any of the company-specific risk be diversified away by investing in both Tex Ray and Ta Jiang 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 Ta Jiang 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 Ta Jiang Co, you can compare the effects of market volatilities on Tex Ray and Ta Jiang 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 Ta Jiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Ray and Ta Jiang.
Diversification Opportunities for Tex Ray and Ta Jiang
Weak diversification
The 3 months correlation between Tex and 1453 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Tex Ray Industrial Co and Ta Jiang Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ta Jiang 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 Ta Jiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ta Jiang has no effect on the direction of Tex Ray i.e., Tex Ray and Ta Jiang go up and down completely randomly.
Pair Corralation between Tex Ray and Ta Jiang
Assuming the 90 days trading horizon Tex Ray Industrial Co is expected to under-perform the Ta Jiang. But the stock apears to be less risky and, when comparing its historical volatility, Tex Ray Industrial Co is 2.47 times less risky than Ta Jiang. The stock trades about -0.01 of its potential returns per unit of risk. The Ta Jiang Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,570 in Ta Jiang Co on November 29, 2024 and sell it today you would earn a total of 155.00 from holding Ta Jiang Co or generate 9.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tex Ray Industrial Co vs. Ta Jiang Co
Performance |
| Timeline |
| Tex Ray Industrial |
| Ta Jiang |
Tex Ray and Ta Jiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tex Ray and Ta Jiang
The main advantage of trading using opposite Tex Ray and Ta Jiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tex Ray position performs unexpectedly, Ta Jiang 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 Ta Jiang will offset losses from the drop in Ta Jiang's long position.| Tex Ray vs. Tainan Enterprises Co | Tex Ray vs. De Licacy Industrial | Tex Ray vs. Nien Hsing Textile | Tex Ray vs. Wisher Industrial Co |
| Ta Jiang vs. De Licacy Industrial | Ta Jiang vs. Wisher Industrial Co | Ta Jiang vs. Tainan Enterprises Co | Ta Jiang vs. Nien Hsing Textile |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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