Correlation Between MGP Ingredients and THRACE PLASTICS
Can any of the company-specific risk be diversified away by investing in both MGP Ingredients 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 MGP Ingredients and THRACE PLASTICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGP Ingredients and THRACE PLASTICS, you can compare the effects of market volatilities on MGP Ingredients 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 MGP Ingredients with a short position of THRACE PLASTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGP Ingredients and THRACE PLASTICS.
Diversification Opportunities for MGP Ingredients and THRACE PLASTICS
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between MGP and THRACE is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding MGP Ingredients and THRACE PLASTICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THRACE PLASTICS and MGP Ingredients 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 MGP Ingredients 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 MGP Ingredients i.e., MGP Ingredients and THRACE PLASTICS go up and down completely randomly.
Pair Corralation between MGP Ingredients and THRACE PLASTICS
Assuming the 90 days trading horizon MGP Ingredients is expected to under-perform the THRACE PLASTICS. In addition to that, MGP Ingredients is 1.7 times more volatile than THRACE PLASTICS. It trades about -0.21 of its total potential returns per unit of risk. THRACE PLASTICS is currently generating about 0.1 per unit of volatility. If you would invest 387.00 in THRACE PLASTICS on December 27, 2024 and sell it today you would earn a total of 36.00 from holding THRACE PLASTICS or generate 9.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.41% |
Values | Daily Returns |
MGP Ingredients vs. THRACE PLASTICS
Performance |
Timeline |
MGP Ingredients |
THRACE PLASTICS |
MGP Ingredients and THRACE PLASTICS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MGP Ingredients and THRACE PLASTICS
The main advantage of trading using opposite MGP Ingredients and THRACE PLASTICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGP Ingredients 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.MGP Ingredients vs. Broadridge Financial Solutions | MGP Ingredients vs. Fukuyama Transporting Co | MGP Ingredients vs. OFFICE DEPOT | MGP Ingredients vs. COPLAND ROAD CAPITAL |
THRACE PLASTICS vs. Algonquin Power Utilities | THRACE PLASTICS vs. NH Foods | THRACE PLASTICS vs. Lifeway Foods | THRACE PLASTICS vs. INTERSHOP Communications Aktiengesellschaft |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |