Correlation Between Tex Ray and First Copper
Can any of the company-specific risk be diversified away by investing in both Tex Ray and First Copper 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 First Copper 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 First Copper Technology, you can compare the effects of market volatilities on Tex Ray and First Copper 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 First Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Ray and First Copper.
Diversification Opportunities for Tex Ray and First Copper
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tex and First is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Tex Ray Industrial Co and First Copper Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Copper Technology 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 First Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Copper Technology has no effect on the direction of Tex Ray i.e., Tex Ray and First Copper go up and down completely randomly.
Pair Corralation between Tex Ray and First Copper
Assuming the 90 days trading horizon Tex Ray Industrial Co is expected to generate 0.66 times more return on investment than First Copper. However, Tex Ray Industrial Co is 1.52 times less risky than First Copper. It trades about -0.03 of its potential returns per unit of risk. First Copper Technology is currently generating about -0.08 per unit of risk. If you would invest 1,150 in Tex Ray Industrial Co on September 1, 2024 and sell it today you would lose (70.00) from holding Tex Ray Industrial Co or give up 6.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tex Ray Industrial Co vs. First Copper Technology
Performance |
| Timeline |
| Tex Ray Industrial |
| First Copper Technology |
Tex Ray and First Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tex Ray and First Copper
The main advantage of trading using opposite Tex Ray and First Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tex Ray position performs unexpectedly, First Copper 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 First Copper will offset losses from the drop in First Copper'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 |
| First Copper vs. Basso Industry Corp | First Copper vs. Chung Hsin Electric Machinery | First Copper vs. TYC Brother Industrial | First Copper vs. TECO Electric Machinery |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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