Correlation Between Hartalega Holdings and Tex Cycle

Can any of the company-specific risk be diversified away by investing in both Hartalega Holdings and Tex Cycle 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 Hartalega Holdings and Tex Cycle into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Hartalega Holdings and Tex Cycle

0.55

Correlation Coefficient

Hartalega Holdings  Tex Cycle

Very weak diversification

The 3 months correlation between Hartalega and Tex is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hartalega Holdings Bhd and Tex Cycle Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tex Cycle Technology and Hartalega Holdings 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 Hartalega Holdings Bhd are associated (or correlated) with Tex Cycle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tex Cycle Technology has no effect on the direction of Hartalega Holdings i.e., Hartalega Holdings and Tex Cycle go up and down completely randomly.

Pair Corralation between Hartalega Holdings and Tex Cycle

Assuming the 90 days trading horizon Hartalega Holdings Bhd is expected to under-perform the Tex Cycle. In addition to that, Hartalega Holdings is 2.34 times more volatile than Tex Cycle Technology. It trades about -0.16 of its total potential returns per unit of risk. Tex Cycle Technology is currently generating about 0.02 per unit of volatility. If you would invest  104.00  in Tex Cycle Technology on December 1, 2024 and sell it today you would earn a total of  1.00  from holding Tex Cycle Technology or generate 0.96% return on investment over 90 days.

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

Hartalega Holdings Bhd  vs.  Tex Cycle Technology

Hartalega Holdings Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hartalega Holdings Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Tex Cycle Technology

Risk-Adjusted Performance

Weak

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

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

The idea behind Hartalega Holdings Bhd and Tex Cycle 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.