Correlation Between Cargojet and TOMI Environmental
Can any of the company-specific risk be diversified away by investing in both Cargojet and TOMI Environmental 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 Cargojet and TOMI Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cargojet and TOMI Environmental Solutions, you can compare the effects of market volatilities on Cargojet and TOMI Environmental 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 Cargojet with a short position of TOMI Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cargojet and TOMI Environmental.
Diversification Opportunities for Cargojet and TOMI Environmental
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cargojet and TOMI is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cargojet and TOMI Environmental Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOMI Environmental and Cargojet 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 Cargojet are associated (or correlated) with TOMI Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOMI Environmental has no effect on the direction of Cargojet i.e., Cargojet and TOMI Environmental go up and down completely randomly.
Pair Corralation between Cargojet and TOMI Environmental
Assuming the 90 days horizon Cargojet is expected to generate 2.75 times less return on investment than TOMI Environmental. But when comparing it to its historical volatility, Cargojet is 2.14 times less risky than TOMI Environmental. It trades about 0.03 of its potential returns per unit of risk. TOMI Environmental Solutions is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 64.00 in TOMI Environmental Solutions on September 12, 2024 and sell it today you would earn a total of 9.00 from holding TOMI Environmental Solutions or generate 14.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 75.28% |
| Values | Daily Returns |
Cargojet vs. TOMI Environmental Solutions
Performance |
| Timeline |
| Cargojet |
| TOMI Environmental |
Cargojet and TOMI Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cargojet and TOMI Environmental
The main advantage of trading using opposite Cargojet and TOMI Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cargojet position performs unexpectedly, TOMI Environmental 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 TOMI Environmental will offset losses from the drop in TOMI Environmental's long position.| Cargojet vs. Hub Group | Cargojet vs. Expeditors International of | Cargojet vs. JB Hunt Transport | Cargojet vs. CH Robinson Worldwide |
| TOMI Environmental vs. Decision Diagnostics | TOMI Environmental vs. Kronos Advanced Technologies | TOMI Environmental vs. GeoVax Labs | TOMI Environmental vs. Creative Realities |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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