Correlation Between Minetech Resources and Tex Cycle
Can any of the company-specific risk be diversified away by investing in both Minetech Resources 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 Minetech Resources and Tex Cycle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minetech Resources Bhd and Tex Cycle Technology, you can compare the effects of market volatilities on Minetech Resources 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 Minetech Resources with a short position of Tex Cycle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minetech Resources and Tex Cycle.
Diversification Opportunities for Minetech Resources and Tex Cycle
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Minetech and Tex is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Minetech Resources 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 Minetech Resources 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 Minetech Resources 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 Minetech Resources i.e., Minetech Resources and Tex Cycle go up and down completely randomly.
Pair Corralation between Minetech Resources and Tex Cycle
Assuming the 90 days trading horizon Minetech Resources Bhd is expected to generate 2.92 times more return on investment than Tex Cycle. However, Minetech Resources is 2.92 times more volatile than Tex Cycle Technology. It trades about 0.08 of its potential returns per unit of risk. Tex Cycle Technology is currently generating about 0.05 per unit of risk. If you would invest 4.00 in Minetech Resources Bhd on August 27, 2024 and sell it today you would earn a total of 10.00 from holding Minetech Resources Bhd or generate 250.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minetech Resources Bhd vs. Tex Cycle Technology
Performance |
| Timeline |
| Minetech Resources Bhd |
| Tex Cycle Technology |
Minetech Resources and Tex Cycle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minetech Resources and Tex Cycle
The main advantage of trading using opposite Minetech Resources and Tex Cycle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minetech Resources 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.| Minetech Resources vs. HeiTech Padu Bhd | Minetech Resources vs. Lysaght Galvanized Steel | Minetech Resources vs. Digistar Bhd | Minetech Resources vs. Swift Haulage Bhd |
| Tex Cycle vs. YTL Hospitality REIT | Tex Cycle vs. Radiant Globaltech Bhd | Tex Cycle vs. Magni Tech Industries | Tex Cycle vs. Cosmos Technology International |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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