Correlation Between BII Railway and Toho
Can any of the company-specific risk be diversified away by investing in both BII Railway 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 BII Railway and Toho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BII Railway Transportation and Toho Co, you can compare the effects of market volatilities on BII Railway 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 BII Railway with a short position of Toho. Check out your portfolio center. Please also check ongoing floating volatility patterns of BII Railway and Toho.
Diversification Opportunities for BII Railway and Toho
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BII and Toho is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding BII Railway Transportation and Toho Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toho and BII Railway 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 BII Railway Transportation 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 BII Railway i.e., BII Railway and Toho go up and down completely randomly.
Pair Corralation between BII Railway and Toho
Assuming the 90 days horizon BII Railway is expected to generate 10.66 times less return on investment than Toho. But when comparing it to its historical volatility, BII Railway Transportation is 1.72 times less risky than Toho. It trades about 0.01 of its potential returns per unit of risk. Toho Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,418 in Toho Co on September 28, 2024 and sell it today you would earn a total of 2,622 from holding Toho Co or generate 184.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BII Railway Transportation vs. Toho Co
Performance |
| Timeline |
| BII Railway Transpor |
| Toho |
BII Railway and Toho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BII Railway and Toho
The main advantage of trading using opposite BII Railway and Toho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BII Railway 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.| BII Railway vs. Lifeway Foods | BII Railway vs. SENECA FOODS A | BII Railway vs. Austevoll Seafood ASA | BII Railway vs. CN MODERN DAIRY |
| Toho vs. BII Railway Transportation | Toho vs. The Yokohama Rubber | Toho vs. Broadcom | Toho vs. Applied Materials |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |