Correlation Between Toro and Stevanato Group
Can any of the company-specific risk be diversified away by investing in both Toro and Stevanato Group 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 Toro and Stevanato Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Toro Co and Stevanato Group SpA, you can compare the effects of market volatilities on Toro and Stevanato Group 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 Toro with a short position of Stevanato Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toro and Stevanato Group.
Diversification Opportunities for Toro and Stevanato Group
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Toro and Stevanato is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Toro Co and Stevanato Group SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stevanato Group SpA and Toro 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 Toro Co are associated (or correlated) with Stevanato Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stevanato Group SpA has no effect on the direction of Toro i.e., Toro and Stevanato Group go up and down completely randomly.
Pair Corralation between Toro and Stevanato Group
Considering the 90-day investment horizon Toro Co is expected to under-perform the Stevanato Group. But the stock apears to be less risky and, when comparing its historical volatility, Toro Co is 1.96 times less risky than Stevanato Group. The stock trades about -0.31 of its potential returns per unit of risk. The Stevanato Group SpA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,114 in Stevanato Group SpA on November 27, 2024 and sell it today you would lose (2.00) from holding Stevanato Group SpA or give up 0.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Toro Co vs. Stevanato Group SpA
Performance |
| Timeline |
| Toro |
| Stevanato Group SpA |
Toro and Stevanato Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Toro and Stevanato Group
The main advantage of trading using opposite Toro and Stevanato Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toro position performs unexpectedly, Stevanato Group 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 Stevanato Group will offset losses from the drop in Stevanato Group's long position.The idea behind Toro Co and Stevanato Group SpA 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.| Stevanato Group vs. Haemonetics | Stevanato Group vs. Merit Medical Systems | Stevanato Group vs. AngioDynamics | Stevanato Group vs. AptarGroup |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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