Correlation Between THRACE PLASTICS and Stanley Electric
Can any of the company-specific risk be diversified away by investing in both THRACE PLASTICS and Stanley Electric 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 Stanley Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THRACE PLASTICS and Stanley Electric Co, you can compare the effects of market volatilities on THRACE PLASTICS and Stanley Electric 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 Stanley Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of THRACE PLASTICS and Stanley Electric.
Diversification Opportunities for THRACE PLASTICS and Stanley Electric
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between THRACE and Stanley is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding THRACE PLASTICS and Stanley Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stanley Electric 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 Stanley Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stanley Electric has no effect on the direction of THRACE PLASTICS i.e., THRACE PLASTICS and Stanley Electric go up and down completely randomly.
Pair Corralation between THRACE PLASTICS and Stanley Electric
Assuming the 90 days trading horizon THRACE PLASTICS is expected to generate 1.48 times more return on investment than Stanley Electric. However, THRACE PLASTICS is 1.48 times more volatile than Stanley Electric Co. It trades about 0.17 of its potential returns per unit of risk. Stanley Electric Co is currently generating about 0.08 per unit of risk. If you would invest 395.00 in THRACE PLASTICS on October 15, 2024 and sell it today you would earn a total of 17.00 from holding THRACE PLASTICS or generate 4.3% 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. Stanley Electric Co
Performance |
| Timeline |
| THRACE PLASTICS |
| Stanley Electric |
THRACE PLASTICS and Stanley Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THRACE PLASTICS and Stanley Electric
The main advantage of trading using opposite THRACE PLASTICS and Stanley Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THRACE PLASTICS position performs unexpectedly, Stanley Electric 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 Stanley Electric will offset losses from the drop in Stanley Electric's long position.| THRACE PLASTICS vs. Coor Service Management | THRACE PLASTICS vs. AECOM TECHNOLOGY | THRACE PLASTICS vs. Motorcar Parts of | THRACE PLASTICS vs. Take Two Interactive Software |
| Stanley Electric vs. Hisense Home Appliances | Stanley Electric vs. American Airlines Group | Stanley Electric vs. Beazer Homes USA | Stanley Electric vs. OFFICE DEPOT |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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