Correlation Between YX Precious and Tex Cycle

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

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

Diversification Opportunities for YX Precious and Tex Cycle

-0.06

Correlation Coefficient

YX Precious  Tex Cycle

Good diversification

The 3 months correlation between 0250 and Tex is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding YX Precious Metals 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 YX Precious 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 YX Precious Metals 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 YX Precious i.e., YX Precious and Tex Cycle go up and down completely randomly.

Pair Corralation between YX Precious and Tex Cycle

Assuming the 90 days trading horizon YX Precious Metals is expected to under-perform the Tex Cycle. But the stock apears to be less risky and, when comparing its historical volatility, YX Precious Metals is 1.08 times less risky than Tex Cycle. The stock trades about -0.08 of its potential returns per unit of risk. The Tex Cycle Technology is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  103.00  in Tex Cycle Technology on September 27, 2024 and sell it today you would earn a total of  10.00  from holding Tex Cycle Technology or generate 9.71% return on investment over 90 days.

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

YX Precious Metals  vs.  Tex Cycle Technology

YX Precious Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days YX Precious Metals 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.

Tex Cycle Technology

Risk-Adjusted Performance

0 of 100

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 quite persistent basic indicators, Tex Cycle is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with YX Precious and Tex Cycle

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

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.