Correlation Between TECO Electric and Grape King
Can any of the company-specific risk be diversified away by investing in both TECO Electric and Grape King 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 TECO Electric and Grape King into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TECO Electric Machinery and Grape King Bio, you can compare the effects of market volatilities on TECO Electric and Grape King 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 TECO Electric with a short position of Grape King. Check out your portfolio center. Please also check ongoing floating volatility patterns of TECO Electric and Grape King.
Diversification Opportunities for TECO Electric and Grape King
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TECO and Grape is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding TECO Electric Machinery and Grape King Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grape King Bio and TECO Electric 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 TECO Electric Machinery are associated (or correlated) with Grape King. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grape King Bio has no effect on the direction of TECO Electric i.e., TECO Electric and Grape King go up and down completely randomly.
Pair Corralation between TECO Electric and Grape King
Assuming the 90 days trading horizon TECO Electric Machinery is expected to generate 1.64 times more return on investment than Grape King. However, TECO Electric is 1.64 times more volatile than Grape King Bio. It trades about 0.06 of its potential returns per unit of risk. Grape King Bio is currently generating about 0.1 per unit of risk. If you would invest 4,880 in TECO Electric Machinery on September 15, 2024 and sell it today you would earn a total of 270.00 from holding TECO Electric Machinery or generate 5.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
TECO Electric Machinery vs. Grape King Bio
Performance |
Timeline |
TECO Electric Machinery |
Grape King Bio |
TECO Electric and Grape King Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TECO Electric and Grape King
The main advantage of trading using opposite TECO Electric and Grape King positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TECO Electric position performs unexpectedly, Grape King 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 Grape King will offset losses from the drop in Grape King's long position.TECO Electric vs. Wan Hai Lines | TECO Electric vs. U Ming Marine Transport | TECO Electric vs. China Airlines |
Grape King vs. Standard Foods Corp | Grape King vs. Eclat Textile Co | Grape King vs. Feng Tay Enterprises | Grape King vs. China Steel Chemical |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |