Correlation Between Selected Textiles and Thrace Plastics
Can any of the company-specific risk be diversified away by investing in both Selected Textiles 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 Selected Textiles and Thrace Plastics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Selected Textiles SA and Thrace Plastics Holding, you can compare the effects of market volatilities on Selected Textiles 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 Selected Textiles with a short position of Thrace Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selected Textiles and Thrace Plastics.
Diversification Opportunities for Selected Textiles and Thrace Plastics
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Selected and Thrace is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Selected Textiles SA and Thrace Plastics Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrace Plastics Holding and Selected Textiles 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 Selected Textiles SA 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 Holding has no effect on the direction of Selected Textiles i.e., Selected Textiles and Thrace Plastics go up and down completely randomly.
Pair Corralation between Selected Textiles and Thrace Plastics
Assuming the 90 days trading horizon Selected Textiles SA is expected to generate 4.36 times more return on investment than Thrace Plastics. However, Selected Textiles is 4.36 times more volatile than Thrace Plastics Holding. It trades about 0.38 of its potential returns per unit of risk. Thrace Plastics Holding is currently generating about 0.2 per unit of risk. If you would invest 11.00 in Selected Textiles SA on August 24, 2024 and sell it today you would earn a total of 2.00 from holding Selected Textiles SA or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 31.82% |
| Values | Daily Returns |
Selected Textiles SA vs. Thrace Plastics Holding
Performance |
| Timeline |
| Selected Textiles |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Thrace Plastics Holding |
Selected Textiles and Thrace Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selected Textiles and Thrace Plastics
The main advantage of trading using opposite Selected Textiles and Thrace Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selected Textiles 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' long position.| Selected Textiles vs. Technical Olympic SA | Selected Textiles vs. Iktinos Hellas SA | Selected Textiles vs. GEK TERNA Holdings | Selected Textiles vs. Fourlis Holdings SA |
| Thrace Plastics vs. Daios Plastics SA | Thrace Plastics vs. As Commercial Industrial | Thrace Plastics vs. National Bank of | Thrace Plastics vs. Elvalhalcor Hellenic Copper |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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