Correlation Between Tex Ray and Ton Yi
Can any of the company-specific risk be diversified away by investing in both Tex Ray and Ton Yi 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 Ton Yi 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 Ton Yi Industrial, you can compare the effects of market volatilities on Tex Ray and Ton Yi 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 Ton Yi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Ray and Ton Yi.
Diversification Opportunities for Tex Ray and Ton Yi
Very good diversification
The 3 months correlation between Tex and Ton is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Tex Ray Industrial Co and Ton Yi Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ton Yi Industrial 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 Ton Yi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ton Yi Industrial has no effect on the direction of Tex Ray i.e., Tex Ray and Ton Yi go up and down completely randomly.
Pair Corralation between Tex Ray and Ton Yi
Assuming the 90 days trading horizon Tex Ray Industrial Co is expected to under-perform the Ton Yi. But the stock apears to be less risky and, when comparing its historical volatility, Tex Ray Industrial Co is 1.07 times less risky than Ton Yi. The stock trades about -0.02 of its potential returns per unit of risk. The Ton Yi Industrial is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,685 in Ton Yi Industrial on September 3, 2024 and sell it today you would lose (120.00) from holding Ton Yi Industrial or give up 7.12% 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. Ton Yi Industrial
Performance |
| Timeline |
| Tex Ray Industrial |
| Ton Yi Industrial |
Tex Ray and Ton Yi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tex Ray and Ton Yi
The main advantage of trading using opposite Tex Ray and Ton Yi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tex Ray position performs unexpectedly, Ton Yi 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 Ton Yi will offset losses from the drop in Ton Yi's long position.| Tex Ray vs. Tainan Spinning Co | Tex Ray vs. Chia Her Industrial | Tex Ray vs. WiseChip Semiconductor | Tex Ray vs. Novatek Microelectronics Corp |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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