Correlation Between Tex Ray and Yi Jinn
Can any of the company-specific risk be diversified away by investing in both Tex Ray and Yi Jinn 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 Ray and Yi Jinn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tex Ray Industrial Co and Yi Jinn Industrial, you can compare the effects of market volatilities on Tex Ray and Yi Jinn 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 Ray with a short position of Yi Jinn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Ray and Yi Jinn.
Diversification Opportunities for Tex Ray and Yi Jinn
Significant diversification
The 3 months correlation between Tex and 1457 is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Tex Ray Industrial Co and Yi Jinn Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yi Jinn Industrial and Tex Ray 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 Ray Industrial Co are associated (or correlated) with Yi Jinn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yi Jinn Industrial has no effect on the direction of Tex Ray i.e., Tex Ray and Yi Jinn go up and down completely randomly.
Pair Corralation between Tex Ray and Yi Jinn
Assuming the 90 days trading horizon Tex Ray is expected to generate 1.65 times less return on investment than Yi Jinn. In addition to that, Tex Ray is 1.23 times more volatile than Yi Jinn Industrial. It trades about 0.13 of its total potential returns per unit of risk. Yi Jinn Industrial is currently generating about 0.27 per unit of volatility. If you would invest 1,975 in Yi Jinn Industrial on December 5, 2024 and sell it today you would earn a total of 65.00 from holding Yi Jinn Industrial or generate 3.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Tex Ray Industrial Co vs. Yi Jinn Industrial
Performance |
Timeline |
Tex Ray Industrial |
Yi Jinn Industrial |
Tex Ray and Yi Jinn Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tex Ray and Yi Jinn
The main advantage of trading using opposite Tex Ray and Yi Jinn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tex Ray position performs unexpectedly, Yi Jinn 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 Yi Jinn will offset losses from the drop in Yi Jinn's long position.Tex Ray vs. Tainan Enterprises Co | Tex Ray vs. De Licacy Industrial | Tex Ray vs. Nien Hsing Textile | Tex Ray vs. Wisher Industrial Co |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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