Correlation Between Toho and BANK HANDLOWY
Can any of the company-specific risk be diversified away by investing in both Toho and BANK HANDLOWY 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 Toho and BANK HANDLOWY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Toho Co and BANK HANDLOWY, you can compare the effects of market volatilities on Toho and BANK HANDLOWY 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 Toho with a short position of BANK HANDLOWY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toho and BANK HANDLOWY.
Diversification Opportunities for Toho and BANK HANDLOWY
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Toho and BANK is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Toho Co and BANK HANDLOWY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK HANDLOWY and Toho 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 Toho Co are associated (or correlated) with BANK HANDLOWY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK HANDLOWY has no effect on the direction of Toho i.e., Toho and BANK HANDLOWY go up and down completely randomly.
Pair Corralation between Toho and BANK HANDLOWY
Assuming the 90 days horizon Toho Co is expected to generate 1.83 times more return on investment than BANK HANDLOWY. However, Toho is 1.83 times more volatile than BANK HANDLOWY. It trades about 0.37 of its potential returns per unit of risk. BANK HANDLOWY is currently generating about 0.08 per unit of risk. If you would invest 3,620 in Toho Co on September 20, 2024 and sell it today you would earn a total of 520.00 from holding Toho Co or generate 14.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Toho Co vs. BANK HANDLOWY
Performance |
| Timeline |
| Toho |
| BANK HANDLOWY |
Toho and BANK HANDLOWY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Toho and BANK HANDLOWY
The main advantage of trading using opposite Toho and BANK HANDLOWY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toho position performs unexpectedly, BANK HANDLOWY 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 BANK HANDLOWY will offset losses from the drop in BANK HANDLOWY's long position.| Toho vs. Live Nation Entertainment | Toho vs. Superior Plus Corp | Toho vs. NMI Holdings | Toho vs. SIVERS SEMICONDUCTORS AB |
| BANK HANDLOWY vs. PTT Global Chemical | BANK HANDLOWY vs. Magnachip Semiconductor | BANK HANDLOWY vs. Shin Etsu Chemical Co | BANK HANDLOWY vs. INDO RAMA SYNTHETIC |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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