Correlation Between TOPBI International and Tex Ray
Can any of the company-specific risk be diversified away by investing in both TOPBI International and Tex Ray 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 TOPBI International and Tex Ray into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOPBI International Holdings and Tex Ray Industrial Co, you can compare the effects of market volatilities on TOPBI International and Tex Ray 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 TOPBI International with a short position of Tex Ray. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOPBI International and Tex Ray.
Diversification Opportunities for TOPBI International and Tex Ray
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TOPBI and Tex is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding TOPBI International Holdings and Tex Ray Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tex Ray Industrial and TOPBI International 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 TOPBI International Holdings are associated (or correlated) with Tex Ray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tex Ray Industrial has no effect on the direction of TOPBI International i.e., TOPBI International and Tex Ray go up and down completely randomly.
Pair Corralation between TOPBI International and Tex Ray
Assuming the 90 days trading horizon TOPBI International Holdings is expected to generate 2.88 times more return on investment than Tex Ray. However, TOPBI International is 2.88 times more volatile than Tex Ray Industrial Co. It trades about 0.13 of its potential returns per unit of risk. Tex Ray Industrial Co is currently generating about -0.07 per unit of risk. If you would invest 1,285 in TOPBI International Holdings on September 25, 2024 and sell it today you would earn a total of 225.00 from holding TOPBI International Holdings or generate 17.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
TOPBI International Holdings vs. Tex Ray Industrial Co
Performance |
Timeline |
TOPBI International |
Tex Ray Industrial |
TOPBI International and Tex Ray Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TOPBI International and Tex Ray
The main advantage of trading using opposite TOPBI International and Tex Ray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOPBI International position performs unexpectedly, Tex Ray 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 Ray will offset losses from the drop in Tex Ray's long position.TOPBI International vs. Makalot Industrial Co | TOPBI International vs. Quang Viet Enterprise | TOPBI International vs. Shinkong Textile Co | TOPBI International vs. Tah Hsin Industrial |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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