Correlation Between TOPMATERIAL and National Plastic
Can any of the company-specific risk be diversified away by investing in both TOPMATERIAL and National Plastic 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 TOPMATERIAL and National Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOPMATERIAL LTD and National Plastic Co, you can compare the effects of market volatilities on TOPMATERIAL and National Plastic 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 TOPMATERIAL with a short position of National Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOPMATERIAL and National Plastic.
Diversification Opportunities for TOPMATERIAL and National Plastic
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TOPMATERIAL and National is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding TOPMATERIAL LTD and National Plastic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Plastic and TOPMATERIAL 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 TOPMATERIAL LTD are associated (or correlated) with National Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Plastic has no effect on the direction of TOPMATERIAL i.e., TOPMATERIAL and National Plastic go up and down completely randomly.
Pair Corralation between TOPMATERIAL and National Plastic
Assuming the 90 days trading horizon TOPMATERIAL LTD is expected to under-perform the National Plastic. In addition to that, TOPMATERIAL is 2.72 times more volatile than National Plastic Co. It trades about -0.15 of its total potential returns per unit of risk. National Plastic Co is currently generating about 0.03 per unit of volatility. If you would invest 261,000 in National Plastic Co on September 25, 2024 and sell it today you would earn a total of 5,500 from holding National Plastic Co or generate 2.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
TOPMATERIAL LTD vs. National Plastic Co
Performance |
Timeline |
TOPMATERIAL LTD |
National Plastic |
TOPMATERIAL and National Plastic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TOPMATERIAL and National Plastic
The main advantage of trading using opposite TOPMATERIAL and National Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOPMATERIAL position performs unexpectedly, National Plastic 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 National Plastic will offset losses from the drop in National Plastic's long position.TOPMATERIAL vs. Samsung Electronics Co | TOPMATERIAL vs. Samsung Electronics Co | TOPMATERIAL vs. LG Energy Solution | TOPMATERIAL vs. SK Hynix |
National Plastic vs. Infinitt Healthcare Co | National Plastic vs. LG Household Healthcare | National Plastic vs. DAEDUCK ELECTRONICS CoLtd | National Plastic vs. Aprogen Healthcare Games |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Global Correlations Find global opportunities by holding instruments from different markets |