Correlation Between Thrace Plastics and Eurobank Ergasias
Can any of the company-specific risk be diversified away by investing in both Thrace Plastics and Eurobank Ergasias 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 Thrace Plastics and Eurobank Ergasias into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thrace Plastics Holding and Eurobank Ergasias Services, you can compare the effects of market volatilities on Thrace Plastics and Eurobank Ergasias 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 Thrace Plastics with a short position of Eurobank Ergasias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrace Plastics and Eurobank Ergasias.
Diversification Opportunities for Thrace Plastics and Eurobank Ergasias
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thrace and Eurobank is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Thrace Plastics Holding and Eurobank Ergasias Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurobank Ergasias and Thrace Plastics 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 Thrace Plastics Holding are associated (or correlated) with Eurobank Ergasias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eurobank Ergasias has no effect on the direction of Thrace Plastics i.e., Thrace Plastics and Eurobank Ergasias go up and down completely randomly.
Pair Corralation between Thrace Plastics and Eurobank Ergasias
Assuming the 90 days trading horizon Thrace Plastics Holding is expected to generate 1.18 times more return on investment than Eurobank Ergasias. However, Thrace Plastics is 1.18 times more volatile than Eurobank Ergasias Services. It trades about 0.21 of its potential returns per unit of risk. Eurobank Ergasias Services is currently generating about 0.23 per unit of risk. If you would invest 370.00 in Thrace Plastics Holding on August 27, 2024 and sell it today you would earn a total of 24.00 from holding Thrace Plastics Holding or generate 6.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrace Plastics Holding vs. Eurobank Ergasias Services
Performance |
| Timeline |
| Thrace Plastics Holding |
| Eurobank Ergasias |
Thrace Plastics and Eurobank Ergasias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrace Plastics and Eurobank Ergasias
The main advantage of trading using opposite Thrace Plastics and Eurobank Ergasias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrace Plastics position performs unexpectedly, Eurobank Ergasias 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 Eurobank Ergasias will offset losses from the drop in Eurobank Ergasias' long position.The idea behind Thrace Plastics Holding and Eurobank Ergasias Services 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.| Eurobank Ergasias vs. National Bank of | Eurobank Ergasias vs. EL D Mouzakis | Eurobank Ergasias vs. Lampsa Hellenic Hotels | Eurobank Ergasias vs. Alpha Trust Mutual |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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