Correlation Between Tex Ray and Gordon Auto
Can any of the company-specific risk be diversified away by investing in both Tex Ray and Gordon Auto 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 Gordon Auto 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 Gordon Auto Body, you can compare the effects of market volatilities on Tex Ray and Gordon Auto 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 Gordon Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Ray and Gordon Auto.
Diversification Opportunities for Tex Ray and Gordon Auto
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tex and Gordon is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Tex Ray Industrial Co and Gordon Auto Body in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gordon Auto Body 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 Gordon Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gordon Auto Body has no effect on the direction of Tex Ray i.e., Tex Ray and Gordon Auto go up and down completely randomly.
Pair Corralation between Tex Ray and Gordon Auto
Assuming the 90 days trading horizon Tex Ray Industrial Co is expected to under-perform the Gordon Auto. But the stock apears to be less risky and, when comparing its historical volatility, Tex Ray Industrial Co is 1.49 times less risky than Gordon Auto. The stock trades about -0.03 of its potential returns per unit of risk. The Gordon Auto Body is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,810 in Gordon Auto Body on September 1, 2024 and sell it today you would earn a total of 105.00 from holding Gordon Auto Body or generate 2.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Tex Ray Industrial Co vs. Gordon Auto Body
Performance |
| Timeline |
| Tex Ray Industrial |
| Gordon Auto Body |
Tex Ray and Gordon Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tex Ray and Gordon Auto
The main advantage of trading using opposite Tex Ray and Gordon Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tex Ray position performs unexpectedly, Gordon Auto 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 Gordon Auto will offset losses from the drop in Gordon Auto'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 |
| Gordon Auto vs. Chaintech Technology Corp | Gordon Auto vs. AVerMedia Technologies | Gordon Auto vs. Avision | Gordon Auto 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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