Correlation Between IBF Financial and Tex Ray
Can any of the company-specific risk be diversified away by investing in both IBF Financial 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 IBF Financial and Tex Ray into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBF Financial Holdings and Tex Ray Industrial Co, you can compare the effects of market volatilities on IBF Financial 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 IBF Financial with a short position of Tex Ray. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBF Financial and Tex Ray.
Diversification Opportunities for IBF Financial and Tex Ray
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IBF and Tex is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding IBF Financial Holdings 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 IBF Financial 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 IBF Financial Holdings 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 IBF Financial i.e., IBF Financial and Tex Ray go up and down completely randomly.
Pair Corralation between IBF Financial and Tex Ray
Assuming the 90 days trading horizon IBF Financial Holdings is expected to generate 0.93 times more return on investment than Tex Ray. However, IBF Financial Holdings is 1.07 times less risky than Tex Ray. It trades about 0.05 of its potential returns per unit of risk. Tex Ray Industrial Co is currently generating about 0.0 per unit of risk. If you would invest 1,210 in IBF Financial Holdings on September 2, 2024 and sell it today you would earn a total of 270.00 from holding IBF Financial Holdings or generate 22.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IBF Financial Holdings vs. Tex Ray Industrial Co
Performance |
| Timeline |
| IBF Financial Holdings |
| Tex Ray Industrial |
IBF Financial and Tex Ray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IBF Financial and Tex Ray
The main advantage of trading using opposite IBF Financial and Tex Ray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBF Financial 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.| IBF Financial vs. Taiwan Cooperative Financial | IBF Financial vs. Tait Marketing Distribution | IBF Financial vs. CHINA DEVELOPMENT FINANCIAL | IBF Financial vs. Newretail Co |
| Tex Ray vs. Chaintech Technology Corp | Tex Ray vs. Avision | Tex Ray vs. Clevo Co | Tex Ray vs. Elitegroup Computer Systems |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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