Correlation Between Thrace Plastics and Lampsa Hellenic
Can any of the company-specific risk be diversified away by investing in both Thrace Plastics and Lampsa Hellenic 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 Lampsa Hellenic 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 Lampsa Hellenic Hotels, you can compare the effects of market volatilities on Thrace Plastics and Lampsa Hellenic 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 Lampsa Hellenic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrace Plastics and Lampsa Hellenic.
Diversification Opportunities for Thrace Plastics and Lampsa Hellenic
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thrace and Lampsa is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Thrace Plastics Holding and Lampsa Hellenic Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lampsa Hellenic Hotels 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 Lampsa Hellenic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lampsa Hellenic Hotels has no effect on the direction of Thrace Plastics i.e., Thrace Plastics and Lampsa Hellenic go up and down completely randomly.
Pair Corralation between Thrace Plastics and Lampsa Hellenic
Assuming the 90 days trading horizon Thrace Plastics Holding is expected to generate 8.97 times more return on investment than Lampsa Hellenic. However, Thrace Plastics is 8.97 times more volatile than Lampsa Hellenic Hotels. It trades about 0.21 of its potential returns per unit of risk. Lampsa Hellenic Hotels is currently generating about 0.0 per unit of risk. If you would invest 370.00 in Thrace Plastics Holding on August 28, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrace Plastics Holding vs. Lampsa Hellenic Hotels
Performance |
| Timeline |
| Thrace Plastics Holding |
| Lampsa Hellenic Hotels |
Thrace Plastics and Lampsa Hellenic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrace Plastics and Lampsa Hellenic
The main advantage of trading using opposite Thrace Plastics and Lampsa Hellenic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrace Plastics position performs unexpectedly, Lampsa Hellenic 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 Lampsa Hellenic will offset losses from the drop in Lampsa Hellenic's long position.The idea behind Thrace Plastics Holding and Lampsa Hellenic Hotels 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.| Lampsa Hellenic vs. National Bank of | Lampsa Hellenic vs. N Leventeris SA | Lampsa Hellenic vs. Eurobank Ergasias Services | Lampsa Hellenic vs. Vogiatzoglou Systems SA |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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