Correlation Between Applied Blockchain and Tomra Systems
Can any of the company-specific risk be diversified away by investing in both Applied Blockchain and Tomra Systems 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 Applied Blockchain and Tomra Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Blockchain and Tomra Systems ASA, you can compare the effects of market volatilities on Applied Blockchain and Tomra Systems 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 Applied Blockchain with a short position of Tomra Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Blockchain and Tomra Systems.
Diversification Opportunities for Applied Blockchain and Tomra Systems
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Applied and Tomra is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Applied Blockchain and Tomra Systems ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tomra Systems ASA and Applied Blockchain 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 Applied Blockchain are associated (or correlated) with Tomra Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tomra Systems ASA has no effect on the direction of Applied Blockchain i.e., Applied Blockchain and Tomra Systems go up and down completely randomly.
Pair Corralation between Applied Blockchain and Tomra Systems
Given the investment horizon of 90 days Applied Blockchain is expected to generate 6.27 times more return on investment than Tomra Systems. However, Applied Blockchain is 6.27 times more volatile than Tomra Systems ASA. It trades about 0.16 of its potential returns per unit of risk. Tomra Systems ASA is currently generating about -0.33 per unit of risk. If you would invest 827.00 in Applied Blockchain on August 29, 2024 and sell it today you would earn a total of 186.00 from holding Applied Blockchain or generate 22.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Blockchain vs. Tomra Systems ASA
Performance |
| Timeline |
| Applied Blockchain |
| Tomra Systems ASA |
Applied Blockchain and Tomra Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Blockchain and Tomra Systems
The main advantage of trading using opposite Applied Blockchain and Tomra Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Blockchain position performs unexpectedly, Tomra Systems 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 Tomra Systems will offset losses from the drop in Tomra Systems' long position.| Applied Blockchain vs. Magic Empire Global | Applied Blockchain vs. Zhong Yang Financial | Applied Blockchain vs. Netcapital | Applied Blockchain vs. Lazard |
| Tomra Systems vs. Republic Services | Tomra Systems vs. Waste Connections | Tomra Systems vs. Clean Harbors | Tomra Systems vs. Gfl Environmental Holdings |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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