Correlation Between Teraplast Bist and Electroarges
Can any of the company-specific risk be diversified away by investing in both Teraplast Bist and Electroarges 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 Teraplast Bist and Electroarges into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teraplast Bist and Electroarges S, you can compare the effects of market volatilities on Teraplast Bist and Electroarges 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 Teraplast Bist with a short position of Electroarges. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teraplast Bist and Electroarges.
Diversification Opportunities for Teraplast Bist and Electroarges
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Teraplast and Electroarges is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Teraplast Bist and Electroarges S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electroarges S and Teraplast Bist 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 Teraplast Bist are associated (or correlated) with Electroarges. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electroarges S has no effect on the direction of Teraplast Bist i.e., Teraplast Bist and Electroarges go up and down completely randomly.
Pair Corralation between Teraplast Bist and Electroarges
Assuming the 90 days trading horizon Teraplast Bist is expected to under-perform the Electroarges. But the stock apears to be less risky and, when comparing its historical volatility, Teraplast Bist is 7.24 times less risky than Electroarges. The stock trades about -0.27 of its potential returns per unit of risk. The Electroarges S is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Electroarges S on October 24, 2024 and sell it today you would lose (1.00) from holding Electroarges S or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teraplast Bist vs. Electroarges S
Performance |
| Timeline |
| Teraplast Bist |
| Electroarges S |
Teraplast Bist and Electroarges Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teraplast Bist and Electroarges
The main advantage of trading using opposite Teraplast Bist and Electroarges positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teraplast Bist position performs unexpectedly, Electroarges 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 Electroarges will offset losses from the drop in Electroarges' long position.| Teraplast Bist vs. GRUPUL INDUSTRIAL ELECTROCONTACT | Teraplast Bist vs. Compania Hoteliera InterContinental | Teraplast Bist vs. TRANSILVANIA INVESTMENTS ALLIANCE | Teraplast Bist vs. Erste Group Bank |
| Electroarges vs. Digi Communications NV | Electroarges vs. Evergent Investments SA | Electroarges vs. Turism Hotelur | Electroarges vs. Infinity Capital Investments |
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.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |