Correlation Between Tainan Enterprises and Tex Ray
Can any of the company-specific risk be diversified away by investing in both Tainan Enterprises and Tex Ray 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 Tainan Enterprises and Tex Ray into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tainan Enterprises Co and Tex Ray Industrial Co, you can compare the effects of market volatilities on Tainan Enterprises and Tex Ray 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 Tainan Enterprises with a short position of Tex Ray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tainan Enterprises and Tex Ray.
Diversification Opportunities for Tainan Enterprises and Tex Ray
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tainan and Tex is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Tainan Enterprises Co and Tex Ray Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tex Ray Industrial and Tainan Enterprises 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 Tainan Enterprises Co are associated (or correlated) with Tex Ray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tex Ray Industrial has no effect on the direction of Tainan Enterprises i.e., Tainan Enterprises and Tex Ray go up and down completely randomly.
Pair Corralation between Tainan Enterprises and Tex Ray
Assuming the 90 days trading horizon Tainan Enterprises Co is expected to generate 1.49 times more return on investment than Tex Ray. However, Tainan Enterprises is 1.49 times more volatile than Tex Ray Industrial Co. It trades about 0.49 of its potential returns per unit of risk. Tex Ray Industrial Co is currently generating about 0.34 per unit of risk. If you would invest 3,440 in Tainan Enterprises Co on November 27, 2024 and sell it today you would earn a total of 300.00 from holding Tainan Enterprises Co or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tainan Enterprises Co vs. Tex Ray Industrial Co
Performance |
| Timeline |
| Tainan Enterprises |
| Tex Ray Industrial |
Tainan Enterprises and Tex Ray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tainan Enterprises and Tex Ray
The main advantage of trading using opposite Tainan Enterprises and Tex Ray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tainan Enterprises position performs unexpectedly, Tex Ray 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 Tex Ray will offset losses from the drop in Tex Ray's long position.| Tainan Enterprises vs. Nien Hsing Textile | Tainan Enterprises vs. De Licacy Industrial | Tainan Enterprises vs. Kaulin Mfg | Tainan Enterprises vs. Tex Ray Industrial Co |
| Tex Ray vs. Tainan Enterprises Co | Tex Ray vs. De Licacy Industrial | Tex Ray vs. Nien Hsing Textile | Tex Ray vs. Wisher Industrial 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |