Correlation Between Thrace Plastics and Thessaloniki Water
Can any of the company-specific risk be diversified away by investing in both Thrace Plastics and Thessaloniki Water 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 Thessaloniki Water 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 Thessaloniki Water Supply, you can compare the effects of market volatilities on Thrace Plastics and Thessaloniki Water 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 Thessaloniki Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrace Plastics and Thessaloniki Water.
Diversification Opportunities for Thrace Plastics and Thessaloniki Water
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thrace and Thessaloniki is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Thrace Plastics Holding and Thessaloniki Water Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thessaloniki Water Supply 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 Thessaloniki Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thessaloniki Water Supply has no effect on the direction of Thrace Plastics i.e., Thrace Plastics and Thessaloniki Water go up and down completely randomly.
Pair Corralation between Thrace Plastics and Thessaloniki Water
Assuming the 90 days trading horizon Thrace Plastics Holding is expected to under-perform the Thessaloniki Water. But the stock apears to be less risky and, when comparing its historical volatility, Thrace Plastics Holding is 1.0 times less risky than Thessaloniki Water. The stock trades about -0.01 of its potential returns per unit of risk. The Thessaloniki Water Supply is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 325.00 in Thessaloniki Water Supply on November 3, 2024 and sell it today you would earn a total of 13.00 from holding Thessaloniki Water Supply or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Thrace Plastics Holding vs. Thessaloniki Water Supply
Performance |
| Timeline |
| Thrace Plastics Holding |
| Thessaloniki Water Supply |
Thrace Plastics and Thessaloniki Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrace Plastics and Thessaloniki Water
The main advantage of trading using opposite Thrace Plastics and Thessaloniki Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrace Plastics position performs unexpectedly, Thessaloniki Water 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 Thessaloniki Water will offset losses from the drop in Thessaloniki Water's long position.| Thrace Plastics vs. Marfin Investment Group | Thrace Plastics vs. Piraeus Financial Holdings | Thrace Plastics vs. Lampsa Hellenic Hotels | Thrace Plastics vs. Elvalhalcor Hellenic Copper |
| Thessaloniki Water vs. Hellenic Petroleum SA | Thessaloniki Water vs. Mytilineos SA | Thessaloniki Water vs. Hellenic Telecommunications Organization | Thessaloniki Water vs. Public Power |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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