Correlation Between THRACE PLASTICS and CARSALES
Can any of the company-specific risk be diversified away by investing in both THRACE PLASTICS and CARSALES 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 CARSALES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THRACE PLASTICS and CARSALESCOM, you can compare the effects of market volatilities on THRACE PLASTICS and CARSALES 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 CARSALES. Check out your portfolio center. Please also check ongoing floating volatility patterns of THRACE PLASTICS and CARSALES.
Diversification Opportunities for THRACE PLASTICS and CARSALES
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between THRACE and CARSALES is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding THRACE PLASTICS and CARSALESCOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARSALESCOM 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 CARSALES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARSALESCOM has no effect on the direction of THRACE PLASTICS i.e., THRACE PLASTICS and CARSALES go up and down completely randomly.
Pair Corralation between THRACE PLASTICS and CARSALES
Assuming the 90 days trading horizon THRACE PLASTICS is expected to generate 9.34 times less return on investment than CARSALES. But when comparing it to its historical volatility, THRACE PLASTICS is 1.0 times less risky than CARSALES. It trades about 0.01 of its potential returns per unit of risk. CARSALESCOM is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,292 in CARSALESCOM on September 3, 2024 and sell it today you would earn a total of 1,268 from holding CARSALESCOM or generate 98.14% 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. CARSALESCOM
Performance |
| Timeline |
| THRACE PLASTICS |
| CARSALESCOM |
THRACE PLASTICS and CARSALES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THRACE PLASTICS and CARSALES
The main advantage of trading using opposite THRACE PLASTICS and CARSALES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THRACE PLASTICS position performs unexpectedly, CARSALES 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 CARSALES will offset losses from the drop in CARSALES's long position.| THRACE PLASTICS vs. TOTAL GABON | THRACE PLASTICS vs. Walgreens Boots Alliance | THRACE PLASTICS vs. Peak Resources Limited |
| CARSALES vs. COMBA TELECOM SYST | CARSALES vs. SENECA FOODS A | CARSALES vs. Entravision Communications | CARSALES vs. JJ SNACK FOODS |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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