Correlation Between THRACE PLASTICS and NORTH MEDIA
Can any of the company-specific risk be diversified away by investing in both THRACE PLASTICS and NORTH MEDIA 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 NORTH MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THRACE PLASTICS and NORTH MEDIA, you can compare the effects of market volatilities on THRACE PLASTICS and NORTH MEDIA 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 NORTH MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of THRACE PLASTICS and NORTH MEDIA.
Diversification Opportunities for THRACE PLASTICS and NORTH MEDIA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between THRACE and NORTH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding THRACE PLASTICS and NORTH MEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTH MEDIA 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 are associated (or correlated) with NORTH MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTH MEDIA has no effect on the direction of THRACE PLASTICS i.e., THRACE PLASTICS and NORTH MEDIA go up and down completely randomly.
Pair Corralation between THRACE PLASTICS and NORTH MEDIA
Assuming the 90 days trading horizon THRACE PLASTICS is expected to generate 10.55 times less return on investment than NORTH MEDIA. But when comparing it to its historical volatility, THRACE PLASTICS is 3.76 times less risky than NORTH MEDIA. It trades about 0.02 of its potential returns per unit of risk. NORTH MEDIA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 198.00 in NORTH MEDIA on September 3, 2024 and sell it today you would earn a total of 628.00 from holding NORTH MEDIA or generate 317.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
THRACE PLASTICS vs. NORTH MEDIA
Performance |
Timeline |
THRACE PLASTICS |
NORTH MEDIA |
THRACE PLASTICS and NORTH MEDIA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with THRACE PLASTICS and NORTH MEDIA
The main advantage of trading using opposite THRACE PLASTICS and NORTH MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THRACE PLASTICS position performs unexpectedly, NORTH MEDIA 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 NORTH MEDIA will offset losses from the drop in NORTH MEDIA's long position.THRACE PLASTICS vs. TOTAL GABON | THRACE PLASTICS vs. Walgreens Boots Alliance | THRACE PLASTICS vs. Peak Resources Limited |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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