Correlation Between Tex Cycle and Kobay Tech

Can any of the company-specific risk be diversified away by investing in both Tex Cycle and Kobay Tech 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 Kobay Tech 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 Kobay Tech Bhd, you can compare the effects of market volatilities on Tex Cycle and Kobay Tech 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 Kobay Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Cycle and Kobay Tech.

Diversification Opportunities for Tex Cycle and Kobay Tech

0.59

Correlation Coefficient

Tex Cycle  Kobay Tech

Very weak diversification

The 3 months correlation between Tex and Kobay is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Tex Cycle Technology and Kobay Tech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kobay Tech Bhd 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 Kobay Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kobay Tech Bhd has no effect on the direction of Tex Cycle i.e., Tex Cycle and Kobay Tech go up and down completely randomly.

Pair Corralation between Tex Cycle and Kobay Tech

Assuming the 90 days trading horizon Tex Cycle Technology is expected to under-perform the Kobay Tech. But the stock apears to be less risky and, when comparing its historical volatility, Tex Cycle Technology is 1.12 times less risky than Kobay Tech. The stock trades about -0.2 of its potential returns per unit of risk. The Kobay Tech Bhd is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  156.00  in Kobay Tech Bhd on December 30, 2024 and sell it today you would lose (30.00) from holding Kobay Tech Bhd or give up 19.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Tex Cycle Technology  vs.  Kobay Tech Bhd

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.

Kobay Tech Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kobay Tech Bhd 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.

Pair Trading with Tex Cycle and Kobay Tech

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

The idea behind Tex Cycle Technology and Kobay Tech Bhd 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.