Correlation Between Teraplast Bist and Cemacon Zalau

Can any of the company-specific risk be diversified away by investing in both Teraplast Bist and Cemacon Zalau 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 Teraplast Bist and Cemacon Zalau into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Teraplast Bist and Cemacon Zalau, you can compare the effects of market volatilities on Teraplast Bist and Cemacon Zalau 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 Teraplast Bist with a short position of Cemacon Zalau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teraplast Bist and Cemacon Zalau.

Diversification Opportunities for Teraplast Bist and Cemacon Zalau

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Correlation Coefficient

Teraplast Bist  Cemacon Zalau

Pay attention - limited upside

The 3 months correlation between Teraplast and Cemacon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Teraplast Bist and Cemacon Zalau in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cemacon Zalau and Teraplast Bist 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 Teraplast Bist are associated (or correlated) with Cemacon Zalau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cemacon Zalau has no effect on the direction of Teraplast Bist i.e., Teraplast Bist and Cemacon Zalau go up and down completely randomly.

Pair Corralation between Teraplast Bist and Cemacon Zalau

If you would invest  44.00  in Cemacon Zalau on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Cemacon Zalau or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Teraplast Bist  vs.  Cemacon Zalau

Teraplast Bist

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Teraplast Bist has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Cemacon Zalau

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cemacon Zalau has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Cemacon Zalau is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Teraplast Bist and Cemacon Zalau

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

The idea behind Teraplast Bist and Cemacon Zalau 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.