Correlation Between THRACE PLASTICS and PC Connection
Can any of the company-specific risk be diversified away by investing in both THRACE PLASTICS and PC Connection 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 PC Connection into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THRACE PLASTICS and PC Connection, you can compare the effects of market volatilities on THRACE PLASTICS and PC Connection 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 PC Connection. Check out your portfolio center. Please also check ongoing floating volatility patterns of THRACE PLASTICS and PC Connection.
Diversification Opportunities for THRACE PLASTICS and PC Connection
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between THRACE and PCC is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding THRACE PLASTICS and PC Connection in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PC Connection 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 PC Connection. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PC Connection has no effect on the direction of THRACE PLASTICS i.e., THRACE PLASTICS and PC Connection go up and down completely randomly.
Pair Corralation between THRACE PLASTICS and PC Connection
Assuming the 90 days trading horizon THRACE PLASTICS is expected to under-perform the PC Connection. But the stock apears to be less risky and, when comparing its historical volatility, THRACE PLASTICS is 1.47 times less risky than PC Connection. The stock trades about -0.05 of its potential returns per unit of risk. The PC Connection is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,750 in PC Connection on September 15, 2024 and sell it today you would earn a total of 100.00 from holding PC Connection or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
THRACE PLASTICS vs. PC Connection
Performance |
| Timeline |
| THRACE PLASTICS |
| PC Connection |
THRACE PLASTICS and PC Connection Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THRACE PLASTICS and PC Connection
The main advantage of trading using opposite THRACE PLASTICS and PC Connection positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THRACE PLASTICS position performs unexpectedly, PC Connection 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 PC Connection will offset losses from the drop in PC Connection's long position.| THRACE PLASTICS vs. Apple Inc | THRACE PLASTICS vs. Apple Inc | THRACE PLASTICS vs. Apple Inc | THRACE PLASTICS vs. Apple Inc |
| PC Connection vs. Australian Agricultural | PC Connection vs. THRACE PLASTICS | PC Connection vs. Plastic Omnium | PC Connection vs. Granite Construction |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |