Correlation Between Powertech Industrial and Tex Ray
Can any of the company-specific risk be diversified away by investing in both Powertech Industrial 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 Powertech Industrial and Tex Ray into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Powertech Industrial Co and Tex Ray Industrial Co, you can compare the effects of market volatilities on Powertech Industrial 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 Powertech Industrial with a short position of Tex Ray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Powertech Industrial and Tex Ray.
Diversification Opportunities for Powertech Industrial and Tex Ray
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Powertech and Tex is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Powertech Industrial 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 Powertech Industrial 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 Powertech Industrial 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 Powertech Industrial i.e., Powertech Industrial and Tex Ray go up and down completely randomly.
Pair Corralation between Powertech Industrial and Tex Ray
Assuming the 90 days trading horizon Powertech Industrial Co is expected to generate 2.34 times more return on investment than Tex Ray. However, Powertech Industrial is 2.34 times more volatile than Tex Ray Industrial Co. It trades about 0.05 of its potential returns per unit of risk. Tex Ray Industrial Co is currently generating about -0.01 per unit of risk. If you would invest 1,790 in Powertech Industrial Co on November 19, 2024 and sell it today you would earn a total of 1,030 from holding Powertech Industrial Co or generate 57.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Powertech Industrial Co vs. Tex Ray Industrial Co
Performance |
| Timeline |
| Powertech Industrial |
| Tex Ray Industrial |
Powertech Industrial and Tex Ray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Powertech Industrial and Tex Ray
The main advantage of trading using opposite Powertech Industrial and Tex Ray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Powertech Industrial 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.| Powertech Industrial vs. Leader Electronics | Powertech Industrial vs. Darwin Precisions Corp | Powertech Industrial vs. Silitech Technology Corp | Powertech Industrial vs. Altek Corp |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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