Correlation Between Concraft Holding and Tex Year

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

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

Diversification Opportunities for Concraft Holding and Tex Year

0.36

Correlation Coefficient

Concraft Holding  Tex Year

Weak diversification

The 3 months correlation between Concraft and Tex is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Concraft Holding Co and Tex Year Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tex Year Industries and Concraft Holding 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 Concraft Holding Co are associated (or correlated) with Tex Year. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tex Year Industries has no effect on the direction of Concraft Holding i.e., Concraft Holding and Tex Year go up and down completely randomly.

Pair Corralation between Concraft Holding and Tex Year

Assuming the 90 days trading horizon Concraft Holding Co is expected to under-perform the Tex Year. But the stock apears to be less risky and, when comparing its historical volatility, Concraft Holding Co is 1.3 times less risky than Tex Year. The stock trades about -0.23 of its potential returns per unit of risk. The Tex Year Industries is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,000  in Tex Year Industries on September 4, 2024 and sell it today you would lose (50.00) from holding Tex Year Industries or give up 2.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Concraft Holding Co  vs.  Tex Year Industries

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 abnormal 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.

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 fairly stable basic indicators, Tex Year is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Concraft Holding and Tex Year

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

The idea behind Concraft Holding Co and Tex Year Industries 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.