Correlation Between GEK TERNA and Thrace Plastics

Can any of the company-specific risk be diversified away by investing in both GEK TERNA 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 GEK TERNA and Thrace Plastics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GEK TERNA Holdings and Thrace Plastics Holding, you can compare the effects of market volatilities on GEK TERNA 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 GEK TERNA with a short position of Thrace Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEK TERNA and Thrace Plastics.

Diversification Opportunities for GEK TERNA and Thrace Plastics

0.52

Correlation Coefficient

GEK TERNA  Thrace Plastics

Very weak diversification

The 3 months correlation between GEK and Thrace is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding GEK TERNA Holdings and Thrace Plastics Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrace Plastics Holding and GEK TERNA 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 GEK TERNA Holdings 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 Holding has no effect on the direction of GEK TERNA i.e., GEK TERNA and Thrace Plastics go up and down completely randomly.

Pair Corralation between GEK TERNA and Thrace Plastics

Assuming the 90 days trading horizon GEK TERNA Holdings is expected to generate 0.65 times more return on investment than Thrace Plastics. However, GEK TERNA Holdings is 1.54 times less risky than Thrace Plastics. It trades about 0.13 of its potential returns per unit of risk. Thrace Plastics Holding is currently generating about 0.06 per unit of risk. If you would invest  1,832  in GEK TERNA Holdings on December 30, 2024 and sell it today you would earn a total of  154.00  from holding GEK TERNA Holdings or generate 8.41% return on investment over 90 days.

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

GEK TERNA Holdings  vs.  Thrace Plastics Holding

GEK TERNA Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GEK TERNA Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, GEK TERNA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Thrace Plastics Holding

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thrace Plastics Holding are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Thrace Plastics is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GEK TERNA and Thrace Plastics

The main advantage of trading using opposite GEK TERNA and Thrace Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEK TERNA 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' long position.

The idea behind GEK TERNA Holdings and Thrace Plastics Holding 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.