Correlation Between Daya Materials and Tex Cycle

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

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

Diversification Opportunities for Daya Materials and Tex Cycle

0.53

Correlation Coefficient

Daya Materials  Tex Cycle

Very weak diversification

The 3 months correlation between Daya and Tex is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Daya Materials 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 Daya Materials 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 Daya Materials 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 Daya Materials i.e., Daya Materials and Tex Cycle go up and down completely randomly.

Pair Corralation between Daya Materials and Tex Cycle

Assuming the 90 days trading horizon Daya Materials Bhd is expected to generate 5.47 times more return on investment than Tex Cycle. However, Daya Materials is 5.47 times more volatile than Tex Cycle Technology. It trades about 0.04 of its potential returns per unit of risk. Tex Cycle Technology is currently generating about -0.09 per unit of risk. If you would invest  11.00  in Daya Materials Bhd on December 23, 2024 and sell it today you would earn a total of  0.00  from holding Daya Materials Bhd or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Daya Materials Bhd  vs.  Tex Cycle Technology

Daya Materials Bhd

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Daya Materials Bhd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Daya Materials disclosed solid returns over the last few months and may actually be approaching a breakup point.

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 latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Daya Materials and Tex Cycle

The main advantage of trading using opposite Daya Materials and Tex Cycle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daya Materials 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.

The idea behind Daya Materials Bhd and Tex Cycle Technology 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.