Correlation Between THRACE PLASTICS and CITY OFFICE
Can any of the company-specific risk be diversified away by investing in both THRACE PLASTICS and CITY OFFICE 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 CITY OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THRACE PLASTICS and CITY OFFICE REIT, you can compare the effects of market volatilities on THRACE PLASTICS and CITY OFFICE 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 CITY OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of THRACE PLASTICS and CITY OFFICE.
Diversification Opportunities for THRACE PLASTICS and CITY OFFICE
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between THRACE and CITY is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding THRACE PLASTICS and CITY OFFICE REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITY OFFICE REIT 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 CITY OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITY OFFICE REIT has no effect on the direction of THRACE PLASTICS i.e., THRACE PLASTICS and CITY OFFICE go up and down completely randomly.
Pair Corralation between THRACE PLASTICS and CITY OFFICE
Assuming the 90 days trading horizon THRACE PLASTICS is expected to generate 0.48 times more return on investment than CITY OFFICE. However, THRACE PLASTICS is 2.1 times less risky than CITY OFFICE. It trades about 0.01 of its potential returns per unit of risk. CITY OFFICE REIT is currently generating about 0.0 per unit of risk. If you would invest 392.00 in THRACE PLASTICS on September 3, 2024 and sell it today you would earn a total of 8.00 from holding THRACE PLASTICS or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
THRACE PLASTICS vs. CITY OFFICE REIT
Performance |
| Timeline |
| THRACE PLASTICS |
| CITY OFFICE REIT |
THRACE PLASTICS and CITY OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THRACE PLASTICS and CITY OFFICE
The main advantage of trading using opposite THRACE PLASTICS and CITY OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THRACE PLASTICS position performs unexpectedly, CITY OFFICE 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 CITY OFFICE will offset losses from the drop in CITY OFFICE's long position.| THRACE PLASTICS vs. TOTAL GABON | THRACE PLASTICS vs. Walgreens Boots Alliance | THRACE PLASTICS vs. Peak Resources Limited |
| CITY OFFICE vs. Boston Properties | CITY OFFICE vs. COUSINS PTIES INC | CITY OFFICE vs. Office Properties Income | CITY OFFICE vs. CREMECOMTRSBI DL 001 |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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