Correlation Between Chain Chon and Tex Ray
Can any of the company-specific risk be diversified away by investing in both Chain Chon 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 Chain Chon and Tex Ray into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chain Chon Industrial and Tex Ray Industrial Co, you can compare the effects of market volatilities on Chain Chon 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 Chain Chon with a short position of Tex Ray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chain Chon and Tex Ray.
Diversification Opportunities for Chain Chon and Tex Ray
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chain and Tex is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Chain Chon Industrial 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 Chain Chon 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 Chain Chon Industrial 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 Chain Chon i.e., Chain Chon and Tex Ray go up and down completely randomly.
Pair Corralation between Chain Chon and Tex Ray
Assuming the 90 days trading horizon Chain Chon Industrial is expected to under-perform the Tex Ray. In addition to that, Chain Chon is 2.02 times more volatile than Tex Ray Industrial Co. It trades about -0.29 of its total potential returns per unit of risk. Tex Ray Industrial Co is currently generating about 0.06 per unit of volatility. If you would invest 1,060 in Tex Ray Industrial Co on August 30, 2024 and sell it today you would earn a total of 20.00 from holding Tex Ray Industrial Co or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chain Chon Industrial vs. Tex Ray Industrial Co
Performance |
| Timeline |
| Chain Chon Industrial |
| Tex Ray Industrial |
Chain Chon and Tex Ray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chain Chon and Tex Ray
The main advantage of trading using opposite Chain Chon and Tex Ray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chain Chon 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.| Chain Chon vs. Tung Ho Steel | Chain Chon vs. Wei Chih Steel | Chain Chon vs. Newretail Co | Chain Chon vs. Tang Eng Iron |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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