Correlation Between THRACE PLASTICS and Yakult Honsha
Can any of the company-specific risk be diversified away by investing in both THRACE PLASTICS and Yakult Honsha 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 Yakult Honsha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THRACE PLASTICS and Yakult Honsha CoLtd, you can compare the effects of market volatilities on THRACE PLASTICS and Yakult Honsha 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 Yakult Honsha. Check out your portfolio center. Please also check ongoing floating volatility patterns of THRACE PLASTICS and Yakult Honsha.
Diversification Opportunities for THRACE PLASTICS and Yakult Honsha
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between THRACE and Yakult is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding THRACE PLASTICS and Yakult Honsha CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yakult Honsha CoLtd 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 Yakult Honsha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yakult Honsha CoLtd has no effect on the direction of THRACE PLASTICS i.e., THRACE PLASTICS and Yakult Honsha go up and down completely randomly.
Pair Corralation between THRACE PLASTICS and Yakult Honsha
Assuming the 90 days trading horizon THRACE PLASTICS is expected to generate 1.49 times more return on investment than Yakult Honsha. However, THRACE PLASTICS is 1.49 times more volatile than Yakult Honsha CoLtd. It trades about 0.2 of its potential returns per unit of risk. Yakult Honsha CoLtd is currently generating about -0.25 per unit of risk. If you would invest 394.00 in THRACE PLASTICS on October 23, 2024 and sell it today you would earn a total of 21.00 from holding THRACE PLASTICS or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
THRACE PLASTICS vs. Yakult Honsha CoLtd
Performance |
| Timeline |
| THRACE PLASTICS |
| Yakult Honsha CoLtd |
THRACE PLASTICS and Yakult Honsha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THRACE PLASTICS and Yakult Honsha
The main advantage of trading using opposite THRACE PLASTICS and Yakult Honsha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THRACE PLASTICS position performs unexpectedly, Yakult Honsha 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 Yakult Honsha will offset losses from the drop in Yakult Honsha's long position.| THRACE PLASTICS vs. Kingdee International Software | THRACE PLASTICS vs. Vishay Intertechnology | THRACE PLASTICS vs. X FAB Silicon Foundries | THRACE PLASTICS vs. Siamgas And Petrochemicals |
| Yakult Honsha vs. JLF INVESTMENT | Yakult Honsha vs. SLR Investment Corp | Yakult Honsha vs. New Residential Investment | Yakult Honsha vs. Universal Insurance Holdings |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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