Correlation Between Thrace Plastics and Hellenic Petroleum

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

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

Diversification Opportunities for Thrace Plastics and Hellenic Petroleum

0.12

Correlation Coefficient

Thrace Plastics  Hellenic Petroleum

Average diversification

The 3 months correlation between Thrace and Hellenic is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Thrace Plastics Holding and Hellenic Petroleum SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hellenic Petroleum and Thrace Plastics 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 Thrace Plastics Holding are associated (or correlated) with Hellenic Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hellenic Petroleum has no effect on the direction of Thrace Plastics i.e., Thrace Plastics and Hellenic Petroleum go up and down completely randomly.

Pair Corralation between Thrace Plastics and Hellenic Petroleum

Assuming the 90 days trading horizon Thrace Plastics is expected to generate 1.25 times less return on investment than Hellenic Petroleum. In addition to that, Thrace Plastics is 1.75 times more volatile than Hellenic Petroleum SA. It trades about 0.06 of its total potential returns per unit of risk. Hellenic Petroleum SA is currently generating about 0.14 per unit of volatility. If you would invest  731.00  in Hellenic Petroleum SA on December 29, 2024 and sell it today you would earn a total of  57.00  from holding Hellenic Petroleum SA or generate 7.8% return on investment over 90 days.

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

Thrace Plastics Holding  vs.  Hellenic Petroleum SA

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 weak basic indicators, Thrace Plastics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Hellenic Petroleum

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hellenic Petroleum SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hellenic Petroleum may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Thrace Plastics and Hellenic Petroleum

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

The idea behind Thrace Plastics Holding and Hellenic Petroleum SA 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.