Correlation Between THRACE PLASTICS and NORTH MEDIA

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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

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  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 Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

THRACE PLASTICS  vs.  NORTH MEDIA

 Performance 
       Timeline  
THRACE PLASTICS 

Risk-Adjusted Performance

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Compared to the overall equity markets, risk-adjusted returns on investments in THRACE PLASTICS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, THRACE PLASTICS is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
NORTH MEDIA 

Risk-Adjusted Performance

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Over the last 90 days NORTH MEDIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, NORTH MEDIA is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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.
The idea behind THRACE PLASTICS and NORTH MEDIA 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.
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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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