Correlation Between Eskay Mining and THRACE PLASTICS
Can any of the company-specific risk be diversified away by investing in both Eskay Mining 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 Eskay Mining and THRACE PLASTICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eskay Mining Corp and THRACE PLASTICS, you can compare the effects of market volatilities on Eskay Mining 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 Eskay Mining with a short position of THRACE PLASTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eskay Mining and THRACE PLASTICS.
Diversification Opportunities for Eskay Mining and THRACE PLASTICS
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eskay and THRACE is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Eskay Mining Corp and THRACE PLASTICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THRACE PLASTICS and Eskay Mining 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 Eskay Mining Corp 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 Eskay Mining i.e., Eskay Mining and THRACE PLASTICS go up and down completely randomly.
Pair Corralation between Eskay Mining and THRACE PLASTICS
Assuming the 90 days horizon Eskay Mining Corp is expected to under-perform the THRACE PLASTICS. In addition to that, Eskay Mining is 3.82 times more volatile than THRACE PLASTICS. It trades about -0.03 of its total potential returns per unit of risk. THRACE PLASTICS is currently generating about 0.02 per unit of volatility. If you would invest 368.00 in THRACE PLASTICS on September 26, 2024 and sell it today you would earn a total of 26.00 from holding THRACE PLASTICS or generate 7.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eskay Mining Corp vs. THRACE PLASTICS
Performance |
| Timeline |
| Eskay Mining Corp |
| THRACE PLASTICS |
Eskay Mining and THRACE PLASTICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eskay Mining and THRACE PLASTICS
The main advantage of trading using opposite Eskay Mining and THRACE PLASTICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eskay Mining 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.| Eskay Mining vs. THRACE PLASTICS | Eskay Mining vs. Martin Marietta Materials | Eskay Mining vs. Alfa Financial Software | Eskay Mining vs. Compagnie Plastic Omnium |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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