Correlation Between TAS Offshore and ES Ceramics

Can any of the company-specific risk be diversified away by investing in both TAS Offshore and ES Ceramics 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 TAS Offshore and ES Ceramics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TAS Offshore Bhd and ES Ceramics Technology, you can compare the effects of market volatilities on TAS Offshore and ES Ceramics 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 TAS Offshore with a short position of ES Ceramics. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAS Offshore and ES Ceramics.

Diversification Opportunities for TAS Offshore and ES Ceramics

-0.2

Correlation Coefficient

TAS Offshore  ES Ceramics

Good diversification

The 3 months correlation between TAS and 0100 is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding TAS Offshore Bhd and ES Ceramics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ES Ceramics Technology and TAS Offshore 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 TAS Offshore Bhd are associated (or correlated) with ES Ceramics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ES Ceramics Technology has no effect on the direction of TAS Offshore i.e., TAS Offshore and ES Ceramics go up and down completely randomly.

Pair Corralation between TAS Offshore and ES Ceramics

Assuming the 90 days trading horizon TAS Offshore Bhd is expected to generate 1.13 times more return on investment than ES Ceramics. However, TAS Offshore is 1.13 times more volatile than ES Ceramics Technology. It trades about 0.08 of its potential returns per unit of risk. ES Ceramics Technology is currently generating about 0.01 per unit of risk. If you would invest  20.00  in TAS Offshore Bhd on October 15, 2024 and sell it today you would earn a total of  42.00  from holding TAS Offshore Bhd or generate 210.0% return on investment over 90 days.

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

TAS Offshore Bhd  vs.  ES Ceramics Technology

TAS Offshore Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TAS Offshore Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, TAS Offshore is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

ES Ceramics Technology

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ES Ceramics Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, ES Ceramics 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 TAS Offshore and ES Ceramics

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

The idea behind TAS Offshore Bhd and ES Ceramics 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.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.