Correlation Between THRACE PLASTICS and MOLSON RS

Can any of the company-specific risk be diversified away by investing in both THRACE PLASTICS and MOLSON RS 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 MOLSON RS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between THRACE PLASTICS and MOLSON RS CDA, you can compare the effects of market volatilities on THRACE PLASTICS and MOLSON RS 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 MOLSON RS. Check out your portfolio center. Please also check ongoing floating volatility patterns of THRACE PLASTICS and MOLSON RS.

Diversification Opportunities for THRACE PLASTICS and MOLSON RS

0.44

Correlation Coefficient

THRACE PLASTICS  MOLSON RS

Very weak diversification

The 3 months correlation between THRACE and MOLSON is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding THRACE PLASTICS and MOLSON RS CDA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOLSON RS CDA 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 are associated (or correlated) with MOLSON RS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOLSON RS CDA has no effect on the direction of THRACE PLASTICS i.e., THRACE PLASTICS and MOLSON RS go up and down completely randomly.

Pair Corralation between THRACE PLASTICS and MOLSON RS

Assuming the 90 days trading horizon THRACE PLASTICS is expected to under-perform the MOLSON RS. But the stock apears to be less risky and, when comparing its historical volatility, THRACE PLASTICS is 1.68 times less risky than MOLSON RS. The stock trades about -0.01 of its potential returns per unit of risk. The MOLSON RS CDA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  5,553  in MOLSON RS CDA on October 24, 2024 and sell it today you would lose (203.00) from holding MOLSON RS CDA or give up 3.66% of portfolio value over 90 days.

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

THRACE PLASTICS  vs.  MOLSON RS CDA

THRACE PLASTICS

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in THRACE PLASTICS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, THRACE PLASTICS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MOLSON RS CDA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MOLSON RS CDA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, MOLSON RS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with THRACE PLASTICS and MOLSON RS

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

The idea behind THRACE PLASTICS and MOLSON RS CDA 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.