Correlation Between BLZ and Toncoin
Can any of the company-specific risk be diversified away by investing in both BLZ and Toncoin 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 BLZ and Toncoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BLZ and Toncoin, you can compare the effects of market volatilities on BLZ and Toncoin 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 BLZ with a short position of Toncoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of BLZ and Toncoin.
Diversification Opportunities for BLZ and Toncoin
Very poor diversification
The 3 months correlation between BLZ and Toncoin is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding BLZ and Toncoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toncoin and BLZ 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 BLZ are associated (or correlated) with Toncoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toncoin has no effect on the direction of BLZ i.e., BLZ and Toncoin go up and down completely randomly.
Pair Corralation between BLZ and Toncoin
Assuming the 90 days trading horizon BLZ is expected to generate 1.74 times more return on investment than Toncoin. However, BLZ is 1.74 times more volatile than Toncoin. It trades about 0.09 of its potential returns per unit of risk. Toncoin is currently generating about 0.11 per unit of risk. If you would invest 12.00 in BLZ on August 24, 2024 and sell it today you would earn a total of 1.00 from holding BLZ or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BLZ vs. Toncoin
Performance |
| Timeline |
| BLZ |
| Toncoin |
BLZ and Toncoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BLZ and Toncoin
The main advantage of trading using opposite BLZ and Toncoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BLZ position performs unexpectedly, Toncoin 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 Toncoin will offset losses from the drop in Toncoin's long position.The idea behind BLZ and Toncoin 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.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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |