Correlation Between Nankang Rubber and Tex Ray
Can any of the company-specific risk be diversified away by investing in both Nankang Rubber 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 Nankang Rubber and Tex Ray into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nankang Rubber Tire and Tex Ray Industrial Co, you can compare the effects of market volatilities on Nankang Rubber 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 Nankang Rubber with a short position of Tex Ray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nankang Rubber and Tex Ray.
Diversification Opportunities for Nankang Rubber and Tex Ray
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nankang and Tex is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Nankang Rubber Tire 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 Nankang Rubber 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 Nankang Rubber Tire 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 Nankang Rubber i.e., Nankang Rubber and Tex Ray go up and down completely randomly.
Pair Corralation between Nankang Rubber and Tex Ray
Assuming the 90 days trading horizon Nankang Rubber Tire is expected to under-perform the Tex Ray. In addition to that, Nankang Rubber is 1.62 times more volatile than Tex Ray Industrial Co. It trades about -0.04 of its total potential returns per unit of risk. Tex Ray Industrial Co is currently generating about 0.0 per unit of volatility. If you would invest 1,145 in Tex Ray Industrial Co on August 26, 2024 and sell it today you would lose (15.00) from holding Tex Ray Industrial Co or give up 1.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nankang Rubber Tire vs. Tex Ray Industrial Co
Performance |
| Timeline |
| Nankang Rubber Tire |
| Tex Ray Industrial |
Nankang Rubber and Tex Ray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nankang Rubber and Tex Ray
The main advantage of trading using opposite Nankang Rubber and Tex Ray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nankang Rubber 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.| Nankang Rubber vs. Yulon Motor Co | Nankang Rubber vs. Federal Corp | Nankang Rubber vs. Kenda Rubber Industrial | Nankang Rubber vs. Taiwan Glass Ind |
| Tex Ray vs. Taiwan Semiconductor Manufacturing | Tex Ray vs. Hon Hai Precision | Tex Ray vs. MediaTek | Tex Ray vs. Chunghwa Telecom 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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