Correlation Between Tex Cycle and Southern Steel
Can any of the company-specific risk be diversified away by investing in both Tex Cycle and Southern Steel 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 Tex Cycle and Southern Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tex Cycle Technology and Southern Steel Bhd, you can compare the effects of market volatilities on Tex Cycle and Southern Steel 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 Tex Cycle with a short position of Southern Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Cycle and Southern Steel.
Diversification Opportunities for Tex Cycle and Southern Steel
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tex and Southern is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Tex Cycle Technology and Southern Steel Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Steel Bhd and Tex Cycle 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 Tex Cycle Technology are associated (or correlated) with Southern Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Steel Bhd has no effect on the direction of Tex Cycle i.e., Tex Cycle and Southern Steel go up and down completely randomly.
Pair Corralation between Tex Cycle and Southern Steel
Assuming the 90 days trading horizon Tex Cycle Technology is expected to under-perform the Southern Steel. But the stock apears to be less risky and, when comparing its historical volatility, Tex Cycle Technology is 1.93 times less risky than Southern Steel. The stock trades about -0.05 of its potential returns per unit of risk. The Southern Steel Bhd is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 52.00 in Southern Steel Bhd on September 25, 2024 and sell it today you would earn a total of 0.00 from holding Southern Steel Bhd or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Tex Cycle Technology vs. Southern Steel Bhd
Performance |
Timeline |
Tex Cycle Technology |
Southern Steel Bhd |
Tex Cycle and Southern Steel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tex Cycle and Southern Steel
The main advantage of trading using opposite Tex Cycle and Southern Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tex Cycle position performs unexpectedly, Southern Steel 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 Southern Steel will offset losses from the drop in Southern Steel's long position.Tex Cycle vs. Supercomnet Technologies Bhd | Tex Cycle vs. ES Ceramics Technology | Tex Cycle vs. Systech Bhd | Tex Cycle vs. Resintech Bhd |
Southern Steel vs. Press Metal Bhd | Southern Steel vs. PMB Technology Bhd | Southern Steel vs. Pantech Group Holdings | Southern Steel vs. CSC Steel Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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