Correlation Between Alphabet and Thrace Plastics

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

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

Diversification Opportunities for Alphabet and Thrace Plastics

-0.02

Correlation Coefficient

Alphabet  Thrace Plastics

Good diversification

The 3 months correlation between Alphabet and Thrace is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C 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 Alphabet 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 Alphabet Inc Class C 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 Alphabet i.e., Alphabet and Thrace Plastics go up and down completely randomly.

Pair Corralation between Alphabet and Thrace Plastics

Given the investment horizon of 90 days Alphabet Inc Class C is expected to under-perform the Thrace Plastics. In addition to that, Alphabet is 1.3 times more volatile than Thrace Plastics Holding. It trades about -0.16 of its total potential returns per unit of risk. Thrace Plastics Holding is currently generating about 0.06 per unit of volatility. If you would invest  392.00  in Thrace Plastics Holding on December 30, 2024 and sell it today you would earn a total of  22.00  from holding Thrace Plastics Holding or generate 5.61% return on investment over 90 days.

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

Alphabet Inc Class C  vs.  Thrace Plastics Holding

Alphabet Class C

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alphabet Inc Class C has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 Alphabet and Thrace Plastics

The main advantage of trading using opposite Alphabet and Thrace Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet 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 Alphabet Inc Class C 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 CEOs Directory module to screen CEOs from public companies around the world.