Correlation Between PIE Industrial and Tex Cycle
Can any of the company-specific risk be diversified away by investing in both PIE Industrial and Tex Cycle 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 PIE Industrial and Tex Cycle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIE Industrial Bhd and Tex Cycle Technology, you can compare the effects of market volatilities on PIE Industrial and Tex Cycle 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 PIE Industrial with a short position of Tex Cycle. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIE Industrial and Tex Cycle.
Diversification Opportunities for PIE Industrial and Tex Cycle
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PIE and Tex is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding PIE Industrial Bhd and Tex Cycle Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tex Cycle Technology and PIE 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 PIE Industrial Bhd are associated (or correlated) with Tex Cycle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tex Cycle Technology has no effect on the direction of PIE Industrial i.e., PIE Industrial and Tex Cycle go up and down completely randomly.
Pair Corralation between PIE Industrial and Tex Cycle
Assuming the 90 days trading horizon PIE Industrial Bhd is expected to under-perform the Tex Cycle. In addition to that, PIE Industrial is 2.5 times more volatile than Tex Cycle Technology. It trades about -0.51 of its total potential returns per unit of risk. Tex Cycle Technology is currently generating about -0.33 per unit of volatility. If you would invest 111.00 in Tex Cycle Technology on November 4, 2024 and sell it today you would lose (7.00) from holding Tex Cycle Technology or give up 6.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
PIE Industrial Bhd vs. Tex Cycle Technology
Performance |
| Timeline |
| PIE Industrial Bhd |
| Tex Cycle Technology |
PIE Industrial and Tex Cycle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIE Industrial and Tex Cycle
The main advantage of trading using opposite PIE Industrial and Tex Cycle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIE Industrial position performs unexpectedly, Tex Cycle 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 Cycle will offset losses from the drop in Tex Cycle's long position.| PIE Industrial vs. Kobay Tech Bhd | PIE Industrial vs. Systech Bhd | PIE Industrial vs. Radiant Globaltech Bhd | PIE Industrial vs. Pantech Group Holdings |
| Tex Cycle vs. Kluang Rubber | Tex Cycle vs. Berjaya Food Bhd | Tex Cycle vs. CB Industrial Product | Tex Cycle vs. Kossan Rubber Industries |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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