Correlation Between THRACE PLASTICS and ELECTRONIC ARTS
Can any of the company-specific risk be diversified away by investing in both THRACE PLASTICS and ELECTRONIC ARTS 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 ELECTRONIC ARTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THRACE PLASTICS and ELECTRONIC ARTS, you can compare the effects of market volatilities on THRACE PLASTICS and ELECTRONIC ARTS 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 ELECTRONIC ARTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of THRACE PLASTICS and ELECTRONIC ARTS.
Diversification Opportunities for THRACE PLASTICS and ELECTRONIC ARTS
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between THRACE and ELECTRONIC is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding THRACE PLASTICS and ELECTRONIC ARTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELECTRONIC ARTS 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 ELECTRONIC ARTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELECTRONIC ARTS has no effect on the direction of THRACE PLASTICS i.e., THRACE PLASTICS and ELECTRONIC ARTS go up and down completely randomly.
Pair Corralation between THRACE PLASTICS and ELECTRONIC ARTS
Assuming the 90 days trading horizon THRACE PLASTICS is expected to generate 0.46 times more return on investment than ELECTRONIC ARTS. However, THRACE PLASTICS is 2.15 times less risky than ELECTRONIC ARTS. It trades about 0.12 of its potential returns per unit of risk. ELECTRONIC ARTS is currently generating about -0.3 per unit of risk. If you would invest 393.00 in THRACE PLASTICS on November 4, 2024 and sell it today you would earn a total of 14.00 from holding THRACE PLASTICS or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
THRACE PLASTICS vs. ELECTRONIC ARTS
Performance |
| Timeline |
| THRACE PLASTICS |
| ELECTRONIC ARTS |
THRACE PLASTICS and ELECTRONIC ARTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THRACE PLASTICS and ELECTRONIC ARTS
The main advantage of trading using opposite THRACE PLASTICS and ELECTRONIC ARTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THRACE PLASTICS position performs unexpectedly, ELECTRONIC ARTS 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 ELECTRONIC ARTS will offset losses from the drop in ELECTRONIC ARTS's long position.| THRACE PLASTICS vs. CODERE ONLINE LUX | THRACE PLASTICS vs. YATRA ONLINE DL 0001 | THRACE PLASTICS vs. OPKO HEALTH | THRACE PLASTICS vs. MPH Health Care |
| ELECTRONIC ARTS vs. CHINA EDUCATION GROUP | ELECTRONIC ARTS vs. Norwegian Air Shuttle | ELECTRONIC ARTS vs. Corsair Gaming | ELECTRONIC ARTS vs. SYSTEMAIR AB |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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