Correlation Between Gateway Real and THRACE PLASTICS

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

By analyzing existing cross correlation between Gateway Real Estate and THRACE PLASTICS, you can compare the effects of market volatilities on Gateway Real and THRACE PLASTICS 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 Gateway Real with a short position of THRACE PLASTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gateway Real and THRACE PLASTICS.

Diversification Opportunities for Gateway Real and THRACE PLASTICS

-0.69

Correlation Coefficient

Gateway Real  THRACE PLASTICS

Excellent diversification

The 3 months correlation between Gateway and THRACE is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Gateway Real Estate and THRACE PLASTICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THRACE PLASTICS and Gateway Real 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 Gateway Real Estate are associated (or correlated) with THRACE PLASTICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THRACE PLASTICS has no effect on the direction of Gateway Real i.e., Gateway Real and THRACE PLASTICS go up and down completely randomly.

Pair Corralation between Gateway Real and THRACE PLASTICS

Assuming the 90 days trading horizon Gateway Real Estate is expected to under-perform the THRACE PLASTICS. In addition to that, Gateway Real is 7.05 times more volatile than THRACE PLASTICS. It trades about -0.21 of its total potential returns per unit of risk. THRACE PLASTICS is currently generating about 0.0 per unit of volatility. If you would invest  394.00  in THRACE PLASTICS on September 27, 2024 and sell it today you would earn a total of  0.00  from holding THRACE PLASTICS or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	90.48%
Values	Daily Returns

Gateway Real Estate  vs.  THRACE PLASTICS

Gateway Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gateway Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

THRACE PLASTICS

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in THRACE PLASTICS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, THRACE PLASTICS is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Gateway Real and THRACE PLASTICS

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

The idea behind Gateway Real Estate and THRACE PLASTICS 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.