Correlation Between Calbee and THRACE PLASTICS
Can any of the company-specific risk be diversified away by investing in both Calbee and THRACE PLASTICS 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 Calbee and THRACE PLASTICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calbee Inc and THRACE PLASTICS, you can compare the effects of market volatilities on Calbee and THRACE PLASTICS 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 Calbee with a short position of THRACE PLASTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calbee and THRACE PLASTICS.
Diversification Opportunities for Calbee and THRACE PLASTICS
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Calbee and THRACE is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Calbee Inc and THRACE PLASTICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THRACE PLASTICS and Calbee 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 Calbee Inc are associated (or correlated) with THRACE PLASTICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THRACE PLASTICS has no effect on the direction of Calbee i.e., Calbee and THRACE PLASTICS go up and down completely randomly.
Pair Corralation between Calbee and THRACE PLASTICS
Assuming the 90 days horizon Calbee Inc is expected to under-perform the THRACE PLASTICS. In addition to that, Calbee is 1.05 times more volatile than THRACE PLASTICS. It trades about -0.18 of its total potential returns per unit of risk. THRACE PLASTICS is currently generating about 0.12 per unit of volatility. If you would invest 393.00 in THRACE PLASTICS on November 4, 2024 and sell it today you would earn a total of 14.00 from holding THRACE PLASTICS or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calbee Inc vs. THRACE PLASTICS
Performance |
| Timeline |
| Calbee Inc |
| THRACE PLASTICS |
Calbee and THRACE PLASTICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calbee and THRACE PLASTICS
The main advantage of trading using opposite Calbee and THRACE PLASTICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calbee position performs unexpectedly, THRACE PLASTICS 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 THRACE PLASTICS will offset losses from the drop in THRACE PLASTICS's long position.The idea behind Calbee Inc and THRACE PLASTICS 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.| THRACE PLASTICS vs. CODERE ONLINE LUX | THRACE PLASTICS vs. YATRA ONLINE DL 0001 | THRACE PLASTICS vs. OPKO HEALTH | THRACE PLASTICS vs. MPH Health Care |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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