Correlation Between Compagnie Plastic and THRACE PLASTICS

Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and THRACE PLASTICS 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 Compagnie Plastic and THRACE PLASTICS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Compagnie Plastic Omnium and THRACE PLASTICS, you can compare the effects of market volatilities on Compagnie Plastic and THRACE PLASTICS 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 Compagnie Plastic with a short position of THRACE PLASTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and THRACE PLASTICS.

Diversification Opportunities for Compagnie Plastic and THRACE PLASTICS

-0.03

Correlation Coefficient

Compagnie Plastic  THRACE PLASTICS

Good diversification

The 3 months correlation between Compagnie and THRACE is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and THRACE PLASTICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THRACE PLASTICS and Compagnie Plastic 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 Compagnie Plastic Omnium are associated (or correlated) with THRACE PLASTICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THRACE PLASTICS has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and THRACE PLASTICS go up and down completely randomly.

Pair Corralation between Compagnie Plastic and THRACE PLASTICS

Assuming the 90 days horizon Compagnie Plastic Omnium is expected to under-perform the THRACE PLASTICS. In addition to that, Compagnie Plastic is 1.52 times more volatile than THRACE PLASTICS. It trades about -0.01 of its total potential returns per unit of risk. THRACE PLASTICS is currently generating about 0.02 per unit of volatility. If you would invest  356.00  in THRACE PLASTICS on September 20, 2024 and sell it today you would earn a total of  37.00  from holding THRACE PLASTICS or generate 10.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Compagnie Plastic Omnium  vs.  THRACE PLASTICS

Compagnie Plastic Omnium

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie Plastic Omnium are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Compagnie Plastic reported solid returns over the last few months and may actually be approaching a breakup point.

THRACE PLASTICS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in THRACE PLASTICS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, THRACE PLASTICS is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Compagnie Plastic and THRACE PLASTICS

The main advantage of trading using opposite Compagnie Plastic and THRACE PLASTICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, THRACE PLASTICS 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 THRACE PLASTICS will offset losses from the drop in THRACE PLASTICS's long position.

The idea behind Compagnie Plastic Omnium and THRACE PLASTICS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..