Correlation Between Tex Cycle and Asia Media

Can any of the company-specific risk be diversified away by investing in both Tex Cycle and Asia Media 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 Tex Cycle and Asia Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tex Cycle Technology and Asia Media Group, you can compare the effects of market volatilities on Tex Cycle and Asia Media 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 Tex Cycle with a short position of Asia Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Cycle and Asia Media.

Diversification Opportunities for Tex Cycle and Asia Media

-0.42

Correlation Coefficient

Tex Cycle  Asia Media

Very good diversification

The 3 months correlation between Tex and Asia is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Tex Cycle Technology and Asia Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Media Group and Tex Cycle 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 Tex Cycle Technology are associated (or correlated) with Asia Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Media Group has no effect on the direction of Tex Cycle i.e., Tex Cycle and Asia Media go up and down completely randomly.

Pair Corralation between Tex Cycle and Asia Media

Assuming the 90 days trading horizon Tex Cycle Technology is expected to under-perform the Asia Media. But the stock apears to be less risky and, when comparing its historical volatility, Tex Cycle Technology is 3.79 times less risky than Asia Media. The stock trades about -0.2 of its potential returns per unit of risk. The Asia Media Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  7.00  in Asia Media Group on December 30, 2024 and sell it today you would earn a total of  2.50  from holding Asia Media Group or generate 35.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Tex Cycle Technology  vs.  Asia Media Group

Tex Cycle Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tex Cycle Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Asia Media Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Asia Media Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Asia Media disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tex Cycle and Asia Media

The main advantage of trading using opposite Tex Cycle and Asia Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tex Cycle position performs unexpectedly, Asia Media 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 Asia Media will offset losses from the drop in Asia Media's long position.

The idea behind Tex Cycle Technology and Asia Media Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.