Correlation Between Tex Ray and Goldsun Building
Can any of the company-specific risk be diversified away by investing in both Tex Ray and Goldsun Building 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 Goldsun Building 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 Goldsun Building Materials, you can compare the effects of market volatilities on Tex Ray and Goldsun Building 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 Goldsun Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Ray and Goldsun Building.
Diversification Opportunities for Tex Ray and Goldsun Building
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tex and Goldsun is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Tex Ray Industrial Co and Goldsun Building Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldsun Building Mat 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 Goldsun Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldsun Building Mat has no effect on the direction of Tex Ray i.e., Tex Ray and Goldsun Building go up and down completely randomly.
Pair Corralation between Tex Ray and Goldsun Building
Assuming the 90 days trading horizon Tex Ray is expected to generate 28.38 times less return on investment than Goldsun Building. But when comparing it to its historical volatility, Tex Ray Industrial Co is 1.76 times less risky than Goldsun Building. It trades about 0.01 of its potential returns per unit of risk. Goldsun Building Materials is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,710 in Goldsun Building Materials on August 26, 2024 and sell it today you would earn a total of 2,530 from holding Goldsun Building Materials or generate 93.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tex Ray Industrial Co vs. Goldsun Building Materials
Performance |
| Timeline |
| Tex Ray Industrial |
| Goldsun Building Mat |
Tex Ray and Goldsun Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tex Ray and Goldsun Building
The main advantage of trading using opposite Tex Ray and Goldsun Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tex Ray position performs unexpectedly, Goldsun Building 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 Goldsun Building will offset losses from the drop in Goldsun Building's long position.| Tex Ray vs. Taiwan Semiconductor Manufacturing | Tex Ray vs. Hon Hai Precision | Tex Ray vs. MediaTek | Tex Ray vs. Chunghwa Telecom Co |
| Goldsun Building vs. Cathay Real Estate | Goldsun Building vs. Huaku Development Co | Goldsun Building vs. BES Engineering Co | Goldsun Building vs. Prince Housing Development |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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