Correlation Between THRACE PLASTICS and PENN NATL
Can any of the company-specific risk be diversified away by investing in both THRACE PLASTICS and PENN NATL 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 PENN NATL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THRACE PLASTICS and PENN NATL GAMING, you can compare the effects of market volatilities on THRACE PLASTICS and PENN NATL 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 PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of THRACE PLASTICS and PENN NATL.
Diversification Opportunities for THRACE PLASTICS and PENN NATL
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between THRACE and PENN is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding THRACE PLASTICS and PENN NATL GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN NATL GAMING 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 PENN NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN NATL GAMING has no effect on the direction of THRACE PLASTICS i.e., THRACE PLASTICS and PENN NATL go up and down completely randomly.
Pair Corralation between THRACE PLASTICS and PENN NATL
Assuming the 90 days trading horizon THRACE PLASTICS is expected to generate 0.21 times more return on investment than PENN NATL. However, THRACE PLASTICS is 4.68 times less risky than PENN NATL. It trades about 0.33 of its potential returns per unit of risk. PENN NATL GAMING is currently generating about -0.03 per unit of risk. If you would invest 383.00 in THRACE PLASTICS on October 11, 2024 and sell it today you would earn a total of 16.00 from holding THRACE PLASTICS or generate 4.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
THRACE PLASTICS vs. PENN NATL GAMING
Performance |
| Timeline |
| THRACE PLASTICS |
| PENN NATL GAMING |
THRACE PLASTICS and PENN NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THRACE PLASTICS and PENN NATL
The main advantage of trading using opposite THRACE PLASTICS and PENN NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THRACE PLASTICS position performs unexpectedly, PENN NATL 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 PENN NATL will offset losses from the drop in PENN NATL's long position.| THRACE PLASTICS vs. UNITED RENTALS | THRACE PLASTICS vs. Cincinnati Financial Corp | THRACE PLASTICS vs. GRENKELEASING Dusseldorf | THRACE PLASTICS vs. Fukuyama Transporting Co |
| PENN NATL vs. Caseys General Stores | PENN NATL vs. Agilent Technologies | PENN NATL vs. Amkor Technology | PENN NATL vs. Costco Wholesale Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Stocks Directory Find actively traded stocks across global markets |