Correlation Between Tex Year and Concraft Holding

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

By analyzing existing cross correlation between Tex Year Industries and Concraft Holding Co, you can compare the effects of market volatilities on Tex Year and Concraft Holding 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 Year with a short position of Concraft Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Year and Concraft Holding.

Diversification Opportunities for Tex Year and Concraft Holding

0.15

Correlation Coefficient

Tex Year  Concraft Holding

Average diversification

The 3 months correlation between Tex and Concraft is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Tex Year Industries and Concraft Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concraft Holding and Tex Year 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 Year Industries are associated (or correlated) with Concraft Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concraft Holding has no effect on the direction of Tex Year i.e., Tex Year and Concraft Holding go up and down completely randomly.

Pair Corralation between Tex Year and Concraft Holding

Assuming the 90 days trading horizon Tex Year Industries is expected to generate 1.35 times more return on investment than Concraft Holding. However, Tex Year is 1.35 times more volatile than Concraft Holding Co. It trades about -0.06 of its potential returns per unit of risk. Concraft Holding Co is currently generating about -0.26 per unit of risk. If you would invest  2,140  in Tex Year Industries on September 3, 2024 and sell it today you would lose (195.00) from holding Tex Year Industries or give up 9.11% of portfolio value over 90 days.

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

Tex Year Industries  vs.  Concraft Holding Co

Tex Year Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tex Year Industries 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.

Concraft Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concraft Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Tex Year and Concraft Holding

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

The idea behind Tex Year Industries and Concraft Holding 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.