Correlation Between Tex Ray and Great Computer
Can any of the company-specific risk be diversified away by investing in both Tex Ray and Great Computer 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 Great Computer 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 Great Computer, you can compare the effects of market volatilities on Tex Ray and Great Computer 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 Great Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Ray and Great Computer.
Diversification Opportunities for Tex Ray and Great Computer
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tex and Great is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Tex Ray Industrial Co and Great Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Computer 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 Great Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Computer has no effect on the direction of Tex Ray i.e., Tex Ray and Great Computer go up and down completely randomly.
Pair Corralation between Tex Ray and Great Computer
Assuming the 90 days trading horizon Tex Ray is expected to generate 3.81 times less return on investment than Great Computer. But when comparing it to its historical volatility, Tex Ray Industrial Co is 3.76 times less risky than Great Computer. It trades about 0.11 of its potential returns per unit of risk. Great Computer is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,590 in Great Computer on September 5, 2024 and sell it today you would earn a total of 285.00 from holding Great Computer or generate 17.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Tex Ray Industrial Co vs. Great Computer
Performance |
Timeline |
Tex Ray Industrial |
Great Computer |
Tex Ray and Great Computer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tex Ray and Great Computer
The main advantage of trading using opposite Tex Ray and Great Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tex Ray position performs unexpectedly, Great Computer 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 Great Computer will offset losses from the drop in Great Computer'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 |
Great Computer vs. Tex Ray Industrial Co | Great Computer vs. Tsang Yow Industrial | Great Computer vs. Meiloon Industrial Co | Great Computer vs. Level Biotechnology |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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