Correlation Between THRACE PLASTICS and G5 Entertainment
Can any of the company-specific risk be diversified away by investing in both THRACE PLASTICS and G5 Entertainment 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 G5 Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THRACE PLASTICS and G5 Entertainment AB, you can compare the effects of market volatilities on THRACE PLASTICS and G5 Entertainment 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 G5 Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of THRACE PLASTICS and G5 Entertainment.
Diversification Opportunities for THRACE PLASTICS and G5 Entertainment
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between THRACE and U3I is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding THRACE PLASTICS and G5 Entertainment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G5 Entertainment 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 G5 Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G5 Entertainment has no effect on the direction of THRACE PLASTICS i.e., THRACE PLASTICS and G5 Entertainment go up and down completely randomly.
Pair Corralation between THRACE PLASTICS and G5 Entertainment
Assuming the 90 days trading horizon THRACE PLASTICS is expected to generate 0.57 times more return on investment than G5 Entertainment. However, THRACE PLASTICS is 1.75 times less risky than G5 Entertainment. It trades about 0.01 of its potential returns per unit of risk. G5 Entertainment AB is currently generating about 0.0 per unit of risk. If you would invest 382.00 in THRACE PLASTICS on December 13, 2024 and sell it today you would earn a total of 8.00 from holding THRACE PLASTICS or generate 2.09% 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. G5 Entertainment AB
Performance |
| Timeline |
| THRACE PLASTICS |
| G5 Entertainment |
THRACE PLASTICS and G5 Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THRACE PLASTICS and G5 Entertainment
The main advantage of trading using opposite THRACE PLASTICS and G5 Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THRACE PLASTICS position performs unexpectedly, G5 Entertainment 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 G5 Entertainment will offset losses from the drop in G5 Entertainment's long position.| THRACE PLASTICS vs. TITAN MACHINERY | ||
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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