Correlation Between Plastic Omnium and Stanley Electric
Can any of the company-specific risk be diversified away by investing in both Plastic Omnium and Stanley Electric 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 Plastic Omnium and Stanley Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plastic Omnium and Stanley Electric Co, you can compare the effects of market volatilities on Plastic Omnium and Stanley Electric 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 Plastic Omnium with a short position of Stanley Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plastic Omnium and Stanley Electric.
Diversification Opportunities for Plastic Omnium and Stanley Electric
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Plastic and Stanley is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Plastic Omnium and Stanley Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stanley Electric and Plastic Omnium 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 Plastic Omnium are associated (or correlated) with Stanley Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stanley Electric has no effect on the direction of Plastic Omnium i.e., Plastic Omnium and Stanley Electric go up and down completely randomly.
Pair Corralation between Plastic Omnium and Stanley Electric
Assuming the 90 days trading horizon Plastic Omnium is expected to under-perform the Stanley Electric. In addition to that, Plastic Omnium is 1.43 times more volatile than Stanley Electric Co. It trades about -0.02 of its total potential returns per unit of risk. Stanley Electric Co is currently generating about -0.01 per unit of volatility. If you would invest 1,740 in Stanley Electric Co on September 27, 2024 and sell it today you would lose (210.00) from holding Stanley Electric Co or give up 12.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plastic Omnium vs. Stanley Electric Co
Performance |
| Timeline |
| Plastic Omnium |
| Stanley Electric |
Plastic Omnium and Stanley Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plastic Omnium and Stanley Electric
The main advantage of trading using opposite Plastic Omnium and Stanley Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plastic Omnium position performs unexpectedly, Stanley Electric 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 Stanley Electric will offset losses from the drop in Stanley Electric's long position.| Plastic Omnium vs. Commercial Vehicle Group | Plastic Omnium vs. Zurich Insurance Group | Plastic Omnium vs. Motorcar Parts of | Plastic Omnium vs. Safety Insurance Group |
| Stanley Electric vs. Plastic Omnium | Stanley Electric vs. THRACE PLASTICS | Stanley Electric vs. BJs Restaurants | Stanley Electric vs. AUSNUTRIA DAIRY |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |