Correlation Between Tokocrypto and MANTRA
Can any of the company-specific risk be diversified away by investing in both Tokocrypto and MANTRA 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 Tokocrypto and MANTRA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tokocrypto and MANTRA, you can compare the effects of market volatilities on Tokocrypto and MANTRA 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 Tokocrypto with a short position of MANTRA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tokocrypto and MANTRA.
Diversification Opportunities for Tokocrypto and MANTRA
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tokocrypto and MANTRA is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Tokocrypto and MANTRA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MANTRA and Tokocrypto 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 Tokocrypto are associated (or correlated) with MANTRA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MANTRA has no effect on the direction of Tokocrypto i.e., Tokocrypto and MANTRA go up and down completely randomly.
Pair Corralation between Tokocrypto and MANTRA
Assuming the 90 days trading horizon Tokocrypto is expected to generate 24.45 times less return on investment than MANTRA. But when comparing it to its historical volatility, Tokocrypto is 1.61 times less risky than MANTRA. It trades about 0.01 of its potential returns per unit of risk. MANTRA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 67.00 in MANTRA on September 3, 2024 and sell it today you would earn a total of 289.00 from holding MANTRA or generate 431.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tokocrypto vs. MANTRA
Performance |
| Timeline |
| Tokocrypto |
| MANTRA |
Tokocrypto and MANTRA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tokocrypto and MANTRA
The main advantage of trading using opposite Tokocrypto and MANTRA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokocrypto position performs unexpectedly, MANTRA 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 MANTRA will offset losses from the drop in MANTRA's long position.The idea behind Tokocrypto and MANTRA 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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