Correlation Between ODDITY Tech and Toast
Can any of the company-specific risk be diversified away by investing in both ODDITY Tech and Toast 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 ODDITY Tech and Toast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ODDITY Tech Ltd and Toast Inc, you can compare the effects of market volatilities on ODDITY Tech and Toast 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 ODDITY Tech with a short position of Toast. Check out your portfolio center. Please also check ongoing floating volatility patterns of ODDITY Tech and Toast.
Diversification Opportunities for ODDITY Tech and Toast
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ODDITY and Toast is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding ODDITY Tech Ltd and Toast Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toast Inc and ODDITY Tech 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 ODDITY Tech Ltd are associated (or correlated) with Toast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toast Inc has no effect on the direction of ODDITY Tech i.e., ODDITY Tech and Toast go up and down completely randomly.
Pair Corralation between ODDITY Tech and Toast
Considering the 90-day investment horizon ODDITY Tech Ltd is expected to generate 16.51 times more return on investment than Toast. However, ODDITY Tech is 16.51 times more volatile than Toast Inc. It trades about 0.05 of its potential returns per unit of risk. Toast Inc is currently generating about 0.07 per unit of risk. If you would invest 0.00 in ODDITY Tech Ltd on August 31, 2024 and sell it today you would earn a total of 4,646 from holding ODDITY Tech Ltd or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 93.05% |
| Values | Daily Returns |
ODDITY Tech Ltd vs. Toast Inc
Performance |
| Timeline |
| ODDITY Tech |
| Toast Inc |
ODDITY Tech and Toast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ODDITY Tech and Toast
The main advantage of trading using opposite ODDITY Tech and Toast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ODDITY Tech position performs unexpectedly, Toast 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 Toast will offset losses from the drop in Toast's long position.| ODDITY Tech vs. SentinelOne | ODDITY Tech vs. BlackBerry | ODDITY Tech vs. Global Blue Group | ODDITY Tech vs. Aurora Mobile |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |