Correlation Between Tex Ray and Tainan Enterprises
Can any of the company-specific risk be diversified away by investing in both Tex Ray and Tainan Enterprises 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 Enterprises 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 Enterprises Co, you can compare the effects of market volatilities on Tex Ray and Tainan Enterprises 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 Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Ray and Tainan Enterprises.
Diversification Opportunities for Tex Ray and Tainan Enterprises
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tex and Tainan is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Tex Ray Industrial Co and Tainan Enterprises Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainan Enterprises 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 Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainan Enterprises has no effect on the direction of Tex Ray i.e., Tex Ray and Tainan Enterprises go up and down completely randomly.
Pair Corralation between Tex Ray and Tainan Enterprises
Assuming the 90 days trading horizon Tex Ray Industrial Co is expected to under-perform the Tainan Enterprises. But the stock apears to be less risky and, when comparing its historical volatility, Tex Ray Industrial Co is 1.92 times less risky than Tainan Enterprises. The stock trades about -0.01 of its potential returns per unit of risk. The Tainan Enterprises Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,190 in Tainan Enterprises Co on September 1, 2024 and sell it today you would earn a total of 1,360 from holding Tainan Enterprises Co or generate 62.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tex Ray Industrial Co vs. Tainan Enterprises Co
Performance |
| Timeline |
| Tex Ray Industrial |
| Tainan Enterprises |
Tex Ray and Tainan Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tex Ray and Tainan Enterprises
The main advantage of trading using opposite Tex Ray and Tainan Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tex Ray position performs unexpectedly, Tainan Enterprises 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 Enterprises will offset losses from the drop in Tainan Enterprises' 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 |
| Tainan Enterprises vs. Chaintech Technology Corp | Tainan Enterprises vs. AVerMedia Technologies | Tainan Enterprises vs. Avision | Tainan Enterprises vs. Clevo 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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