Correlation Between Thermal Energy and Vitreous Glass

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

By analyzing existing cross correlation between Thermal Energy International and Vitreous Glass, you can compare the effects of market volatilities on Thermal Energy and Vitreous Glass 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 Thermal Energy with a short position of Vitreous Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermal Energy and Vitreous Glass.

Diversification Opportunities for Thermal Energy and Vitreous Glass

-0.19

Correlation Coefficient

Thermal Energy  Vitreous Glass

Good diversification

The 3 months correlation between Thermal and Vitreous is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Thermal Energy International and Vitreous Glass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitreous Glass and Thermal Energy 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 Thermal Energy International are associated (or correlated) with Vitreous Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitreous Glass has no effect on the direction of Thermal Energy i.e., Thermal Energy and Vitreous Glass go up and down completely randomly.

Pair Corralation between Thermal Energy and Vitreous Glass

Assuming the 90 days horizon Thermal Energy International is expected to under-perform the Vitreous Glass. In addition to that, Thermal Energy is 3.15 times more volatile than Vitreous Glass. It trades about -0.02 of its total potential returns per unit of risk. Vitreous Glass is currently generating about 0.09 per unit of volatility. If you would invest  524.00  in Vitreous Glass on December 1, 2024 and sell it today you would earn a total of  51.00  from holding Vitreous Glass or generate 9.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Thermal Energy International  vs.  Vitreous Glass

Thermal Energy Inter

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thermal Energy International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Vitreous Glass

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vitreous Glass are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Vitreous Glass may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Thermal Energy and Vitreous Glass

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

The idea behind Thermal Energy International and Vitreous Glass 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.