Correlation Between THRACE PLASTICS and Haier Smart
Can any of the company-specific risk be diversified away by investing in both THRACE PLASTICS and Haier Smart 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 Haier Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THRACE PLASTICS and Haier Smart Home, you can compare the effects of market volatilities on THRACE PLASTICS and Haier Smart 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 Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of THRACE PLASTICS and Haier Smart.
Diversification Opportunities for THRACE PLASTICS and Haier Smart
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between THRACE and Haier is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding THRACE PLASTICS and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home 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 Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of THRACE PLASTICS i.e., THRACE PLASTICS and Haier Smart go up and down completely randomly.
Pair Corralation between THRACE PLASTICS and Haier Smart
Assuming the 90 days trading horizon THRACE PLASTICS is expected to generate 4.29 times less return on investment than Haier Smart. But when comparing it to its historical volatility, THRACE PLASTICS is 1.2 times less risky than Haier Smart. It trades about 0.02 of its potential returns per unit of risk. Haier Smart Home is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 96.00 in Haier Smart Home on September 20, 2024 and sell it today you would earn a total of 79.00 from holding Haier Smart Home or generate 82.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
THRACE PLASTICS vs. Haier Smart Home
Performance |
| Timeline |
| THRACE PLASTICS |
| Haier Smart Home |
THRACE PLASTICS and Haier Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THRACE PLASTICS and Haier Smart
The main advantage of trading using opposite THRACE PLASTICS and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THRACE PLASTICS position performs unexpectedly, Haier Smart 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 Haier Smart will offset losses from the drop in Haier Smart's long position.| THRACE PLASTICS vs. Apple Inc | THRACE PLASTICS vs. Apple Inc | THRACE PLASTICS vs. Apple Inc | THRACE PLASTICS vs. Microsoft |
| Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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