Correlation Between Ta Chen and YC Inox

Can any of the company-specific risk be diversified away by investing in both Ta Chen and YC Inox 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 Ta Chen and YC Inox into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ta Chen Stainless and YC Inox Co, you can compare the effects of market volatilities on Ta Chen and YC Inox 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 Ta Chen with a short position of YC Inox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ta Chen and YC Inox.

Diversification Opportunities for Ta Chen and YC Inox

0.17

Correlation Coefficient

Ta Chen  YC Inox

Average diversification

The 3 months correlation between 2027 and 2034 is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ta Chen Stainless and YC Inox Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YC Inox and Ta Chen 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 Ta Chen Stainless are associated (or correlated) with YC Inox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YC Inox has no effect on the direction of Ta Chen i.e., Ta Chen and YC Inox go up and down completely randomly.

Pair Corralation between Ta Chen and YC Inox

Assuming the 90 days trading horizon Ta Chen Stainless is expected to generate 1.22 times more return on investment than YC Inox. However, Ta Chen is 1.22 times more volatile than YC Inox Co. It trades about 0.03 of its potential returns per unit of risk. YC Inox Co is currently generating about -0.07 per unit of risk. If you would invest  3,260  in Ta Chen Stainless on September 12, 2024 and sell it today you would earn a total of  65.00  from holding Ta Chen Stainless or generate 1.99% return on investment over 90 days.

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

Ta Chen Stainless  vs.  YC Inox Co

Ta Chen Stainless

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ta Chen Stainless are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Ta Chen is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

YC Inox

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days YC Inox Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Ta Chen and YC Inox

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

The idea behind Ta Chen Stainless and YC Inox Co 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.