Correlation Between Kiriacoulis Mediterranean and Thrace Plastics
Can any of the company-specific risk be diversified away by investing in both Kiriacoulis Mediterranean 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 Kiriacoulis Mediterranean and Thrace Plastics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kiriacoulis Mediterranean Cruises and Thrace Plastics Holding, you can compare the effects of market volatilities on Kiriacoulis Mediterranean 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 Kiriacoulis Mediterranean with a short position of Thrace Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kiriacoulis Mediterranean and Thrace Plastics.
Diversification Opportunities for Kiriacoulis Mediterranean and Thrace Plastics
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kiriacoulis and Thrace is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kiriacoulis Mediterranean Crui 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 Kiriacoulis Mediterranean 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 Kiriacoulis Mediterranean Cruises 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 Kiriacoulis Mediterranean i.e., Kiriacoulis Mediterranean and Thrace Plastics go up and down completely randomly.
Pair Corralation between Kiriacoulis Mediterranean and Thrace Plastics
Assuming the 90 days trading horizon Kiriacoulis Mediterranean Cruises is expected to under-perform the Thrace Plastics. In addition to that, Kiriacoulis Mediterranean is 1.78 times more volatile than Thrace Plastics Holding. It trades about -0.11 of its total potential returns per unit of risk. Thrace Plastics Holding is currently generating about 0.01 per unit of volatility. If you would invest 393.00 in Thrace Plastics Holding on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Thrace Plastics Holding or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kiriacoulis Mediterranean Crui vs. Thrace Plastics Holding
Performance |
| Timeline |
| Kiriacoulis Mediterranean |
| Thrace Plastics Holding |
Kiriacoulis Mediterranean and Thrace Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kiriacoulis Mediterranean and Thrace Plastics
The main advantage of trading using opposite Kiriacoulis Mediterranean and Thrace Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kiriacoulis Mediterranean 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.The idea behind Kiriacoulis Mediterranean Cruises and Thrace Plastics Holding 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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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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