Correlation Between THRACE PLASTICS and GOLD ROAD
Can any of the company-specific risk be diversified away by investing in both THRACE PLASTICS and GOLD ROAD 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 GOLD ROAD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THRACE PLASTICS and GOLD ROAD RES, you can compare the effects of market volatilities on THRACE PLASTICS and GOLD ROAD 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 GOLD ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of THRACE PLASTICS and GOLD ROAD.
Diversification Opportunities for THRACE PLASTICS and GOLD ROAD
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between THRACE and GOLD is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding THRACE PLASTICS and GOLD ROAD RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD ROAD RES 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 GOLD ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD ROAD RES has no effect on the direction of THRACE PLASTICS i.e., THRACE PLASTICS and GOLD ROAD go up and down completely randomly.
Pair Corralation between THRACE PLASTICS and GOLD ROAD
Assuming the 90 days trading horizon THRACE PLASTICS is expected to generate 0.64 times more return on investment than GOLD ROAD. However, THRACE PLASTICS is 1.56 times less risky than GOLD ROAD. It trades about 0.02 of its potential returns per unit of risk. GOLD ROAD RES is currently generating about 0.0 per unit of risk. If you would invest 388.00 in THRACE PLASTICS on December 4, 2024 and sell it today you would earn a total of 1.00 from holding THRACE PLASTICS or generate 0.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
THRACE PLASTICS vs. GOLD ROAD RES
Performance |
Timeline |
THRACE PLASTICS |
GOLD ROAD RES |
THRACE PLASTICS and GOLD ROAD Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with THRACE PLASTICS and GOLD ROAD
The main advantage of trading using opposite THRACE PLASTICS and GOLD ROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THRACE PLASTICS position performs unexpectedly, GOLD ROAD 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 GOLD ROAD will offset losses from the drop in GOLD ROAD's long position.THRACE PLASTICS vs. Yuexiu Transport Infrastructure | THRACE PLASTICS vs. East Africa Metals | THRACE PLASTICS vs. G III Apparel Group | THRACE PLASTICS vs. DAIDO METAL TD |
GOLD ROAD vs. EITZEN CHEMICALS | GOLD ROAD vs. Mitsui Chemicals | GOLD ROAD vs. IDP EDUCATION LTD | GOLD ROAD vs. AWILCO DRILLING PLC |
Check out your portfolio center.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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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