Correlation Between Thrace Plastics and Optronics Technologies

Can any of the company-specific risk be diversified away by investing in both Thrace Plastics and Optronics Technologies 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 Optronics Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Thrace Plastics Holding and Optronics Technologies SA, you can compare the effects of market volatilities on Thrace Plastics and Optronics Technologies 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 Optronics Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrace Plastics and Optronics Technologies.

Diversification Opportunities for Thrace Plastics and Optronics Technologies

-0.18

Correlation Coefficient

Thrace Plastics  Optronics Technologies

Good diversification

The 3 months correlation between Thrace and Optronics is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Thrace Plastics Holding and Optronics Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optronics Technologies 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 Holding are associated (or correlated) with Optronics Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optronics Technologies has no effect on the direction of Thrace Plastics i.e., Thrace Plastics and Optronics Technologies go up and down completely randomly.

Pair Corralation between Thrace Plastics and Optronics Technologies

Assuming the 90 days trading horizon Thrace Plastics Holding is expected to under-perform the Optronics Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Thrace Plastics Holding is 2.48 times less risky than Optronics Technologies. The stock trades about 0.0 of its potential returns per unit of risk. The Optronics Technologies SA is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  138.00  in Optronics Technologies SA on April 25, 2025 and sell it today you would earn a total of  162.00  from holding Optronics Technologies SA or generate 117.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Thrace Plastics Holding  vs.  Optronics Technologies SA

Thrace Plastics Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thrace Plastics Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Thrace Plastics is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Optronics Technologies

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Optronics Technologies SA are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Optronics Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thrace Plastics and Optronics Technologies

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

The idea behind Thrace Plastics Holding and Optronics Technologies SA 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.