Correlation Between Thrace Plastics and LAMDA Development
Can any of the company-specific risk be diversified away by investing in both Thrace Plastics and LAMDA Development 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 LAMDA Development 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 LAMDA Development SA, you can compare the effects of market volatilities on Thrace Plastics and LAMDA Development 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 LAMDA Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrace Plastics and LAMDA Development.
Diversification Opportunities for Thrace Plastics and LAMDA Development
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thrace and LAMDA is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Thrace Plastics Holding and LAMDA Development SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAMDA Development 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 LAMDA Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAMDA Development has no effect on the direction of Thrace Plastics i.e., Thrace Plastics and LAMDA Development go up and down completely randomly.
Pair Corralation between Thrace Plastics and LAMDA Development
Assuming the 90 days trading horizon Thrace Plastics is expected to generate 2.47 times less return on investment than LAMDA Development. In addition to that, Thrace Plastics is 1.06 times more volatile than LAMDA Development SA. It trades about 0.02 of its total potential returns per unit of risk. LAMDA Development SA is currently generating about 0.04 per unit of volatility. If you would invest 558.00 in LAMDA Development SA on September 2, 2024 and sell it today you would earn a total of 161.00 from holding LAMDA Development SA or generate 28.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrace Plastics Holding vs. LAMDA Development SA
Performance |
| Timeline |
| Thrace Plastics Holding |
| LAMDA Development |
Thrace Plastics and LAMDA Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrace Plastics and LAMDA Development
The main advantage of trading using opposite Thrace Plastics and LAMDA Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrace Plastics position performs unexpectedly, LAMDA Development 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 LAMDA Development will offset losses from the drop in LAMDA Development's long position.| Thrace Plastics vs. National Bank of | Thrace Plastics vs. EL D Mouzakis | Thrace Plastics vs. Lampsa Hellenic Hotels | Thrace Plastics vs. Austriacard Holdings AG |
| LAMDA Development vs. Profile Systems Software | LAMDA Development vs. General Commercial Industrial | LAMDA Development vs. Performance Technologies SA | LAMDA Development vs. Karelia Tobacco |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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