Correlation Between Thrace Plastics and Frigoglass SAIC

Can any of the company-specific risk be diversified away by investing in both Thrace Plastics and Frigoglass SAIC 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 Frigoglass SAIC 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 Frigoglass SAIC, you can compare the effects of market volatilities on Thrace Plastics and Frigoglass SAIC 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 Frigoglass SAIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrace Plastics and Frigoglass SAIC.

Diversification Opportunities for Thrace Plastics and Frigoglass SAIC

-0.11

Correlation Coefficient

Thrace Plastics  Frigoglass SAIC

Good diversification

The 3 months correlation between Thrace and Frigoglass is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Thrace Plastics Holding and Frigoglass SAIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frigoglass SAIC 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 Frigoglass SAIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frigoglass SAIC has no effect on the direction of Thrace Plastics i.e., Thrace Plastics and Frigoglass SAIC go up and down completely randomly.

Pair Corralation between Thrace Plastics and Frigoglass SAIC

Assuming the 90 days trading horizon Thrace Plastics Holding is expected to generate 0.35 times more return on investment than Frigoglass SAIC. However, Thrace Plastics Holding is 2.9 times less risky than Frigoglass SAIC. It trades about 0.06 of its potential returns per unit of risk. Frigoglass SAIC is currently generating about 0.02 per unit of risk. 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

Thrace Plastics Holding  vs.  Frigoglass SAIC

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.

Frigoglass SAIC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Frigoglass SAIC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Frigoglass SAIC is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Thrace Plastics and Frigoglass SAIC

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

The idea behind Thrace Plastics Holding and Frigoglass SAIC 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.