Correlation Between Thrace Plastics and IKloukinas ILappas

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

Diversification Opportunities for Thrace Plastics and IKloukinas ILappas

0.13

Correlation Coefficient

Thrace Plastics  IKloukinas ILappas

Average diversification

The 3 months correlation between Thrace and IKloukinas is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Thrace Plastics Holding and IKloukinas ILappas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IKloukinas ILappas 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 IKloukinas ILappas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IKloukinas ILappas has no effect on the direction of Thrace Plastics i.e., Thrace Plastics and IKloukinas ILappas go up and down completely randomly.

Pair Corralation between Thrace Plastics and IKloukinas ILappas

Assuming the 90 days trading horizon Thrace Plastics is expected to generate 3.34 times less return on investment than IKloukinas ILappas. But when comparing it to its historical volatility, Thrace Plastics Holding is 1.25 times less risky than IKloukinas ILappas. It trades about 0.07 of its potential returns per unit of risk. IKloukinas ILappas SA is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  147.00  in IKloukinas ILappas SA on December 24, 2024 and sell it today you would earn a total of  25.00  from holding IKloukinas ILappas SA or generate 17.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	74.58%
Values	Daily Returns

Thrace Plastics Holding  vs.  IKloukinas ILappas 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 uncertain basic indicators, Thrace Plastics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

IKloukinas ILappas

Risk-Adjusted Performance

Good

Over the last 90 days IKloukinas ILappas SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively uncertain primary indicators, IKloukinas ILappas unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thrace Plastics and IKloukinas ILappas

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

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