Correlation Between LS Starrett and Toro
Can any of the company-specific risk be diversified away by investing in both LS Starrett and Toro 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 LS Starrett and Toro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LS Starrett and Toro Co, you can compare the effects of market volatilities on LS Starrett and Toro 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 LS Starrett with a short position of Toro. Check out your portfolio center. Please also check ongoing floating volatility patterns of LS Starrett and Toro.
Diversification Opportunities for LS Starrett and Toro
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SCX and Toro is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding LS Starrett and Toro Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toro and LS Starrett 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 LS Starrett are associated (or correlated) with Toro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toro has no effect on the direction of LS Starrett i.e., LS Starrett and Toro go up and down completely randomly.
Pair Corralation between LS Starrett and Toro
If you would invest 7,907 in Toro Co on November 2, 2024 and sell it today you would earn a total of 550.00 from holding Toro Co or generate 6.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.26% |
| Values | Daily Returns |
LS Starrett vs. Toro Co
Performance |
| Timeline |
| LS Starrett |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Toro |
LS Starrett and Toro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LS Starrett and Toro
The main advantage of trading using opposite LS Starrett and Toro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LS Starrett position performs unexpectedly, Toro 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 Toro will offset losses from the drop in Toro's long position.| LS Starrett vs. Eastern Co | LS Starrett vs. Timken Company | LS Starrett vs. Lincoln Electric Holdings | LS Starrett vs. Hillman Solutions Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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