Correlation Between BANK HANDLOWY and Toho
Can any of the company-specific risk be diversified away by investing in both BANK HANDLOWY and Toho 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 BANK HANDLOWY and Toho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK HANDLOWY and Toho Co, you can compare the effects of market volatilities on BANK HANDLOWY and Toho 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 BANK HANDLOWY with a short position of Toho. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK HANDLOWY and Toho.
Diversification Opportunities for BANK HANDLOWY and Toho
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BANK and Toho is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding BANK HANDLOWY and Toho Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toho and BANK HANDLOWY 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 BANK HANDLOWY are associated (or correlated) with Toho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toho has no effect on the direction of BANK HANDLOWY i.e., BANK HANDLOWY and Toho go up and down completely randomly.
Pair Corralation between BANK HANDLOWY and Toho
Assuming the 90 days trading horizon BANK HANDLOWY is expected to under-perform the Toho. But the stock apears to be less risky and, when comparing its historical volatility, BANK HANDLOWY is 2.2 times less risky than Toho. The stock trades about -0.01 of its potential returns per unit of risk. The Toho Co is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 3,580 in Toho Co on September 20, 2024 and sell it today you would earn a total of 560.00 from holding Toho Co or generate 15.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK HANDLOWY vs. Toho Co
Performance |
| Timeline |
| BANK HANDLOWY |
| Toho |
BANK HANDLOWY and Toho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK HANDLOWY and Toho
The main advantage of trading using opposite BANK HANDLOWY and Toho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK HANDLOWY position performs unexpectedly, Toho 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 Toho will offset losses from the drop in Toho's long position.| BANK HANDLOWY vs. PTT Global Chemical | BANK HANDLOWY vs. Magnachip Semiconductor | BANK HANDLOWY vs. Shin Etsu Chemical Co | BANK HANDLOWY vs. INDO RAMA SYNTHETIC |
| Toho vs. Live Nation Entertainment | Toho vs. Superior Plus Corp | Toho vs. NMI Holdings | Toho vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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