Correlation Between TOPBI International and Makalot Industrial

Can any of the company-specific risk be diversified away by investing in both TOPBI International and Makalot Industrial 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 TOPBI International and Makalot Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TOPBI International Holdings and Makalot Industrial Co, you can compare the effects of market volatilities on TOPBI International and Makalot Industrial 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 TOPBI International with a short position of Makalot Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOPBI International and Makalot Industrial.

Diversification Opportunities for TOPBI International and Makalot Industrial

-0.75

Correlation Coefficient

TOPBI International  Makalot Industrial

Pay attention - limited upside

The 3 months correlation between TOPBI and Makalot is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding TOPBI International Holdings and Makalot Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Makalot Industrial and TOPBI International 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 TOPBI International Holdings are associated (or correlated) with Makalot Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Makalot Industrial has no effect on the direction of TOPBI International i.e., TOPBI International and Makalot Industrial go up and down completely randomly.

Pair Corralation between TOPBI International and Makalot Industrial

Assuming the 90 days trading horizon TOPBI International Holdings is expected to generate 1.54 times more return on investment than Makalot Industrial. However, TOPBI International is 1.54 times more volatile than Makalot Industrial Co. It trades about 0.22 of its potential returns per unit of risk. Makalot Industrial Co is currently generating about 0.06 per unit of risk. If you would invest  1,370  in TOPBI International Holdings on September 21, 2024 and sell it today you would earn a total of  195.00  from holding TOPBI International Holdings or generate 14.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

TOPBI International Holdings  vs.  Makalot Industrial Co

TOPBI International

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TOPBI International Holdings are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, TOPBI International showed solid returns over the last few months and may actually be approaching a breakup point.

Makalot Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Makalot Industrial Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with TOPBI International and Makalot Industrial

The main advantage of trading using opposite TOPBI International and Makalot Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOPBI International position performs unexpectedly, Makalot Industrial 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 Makalot Industrial will offset losses from the drop in Makalot Industrial's long position.

The idea behind TOPBI International Holdings and Makalot Industrial Co 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.

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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 Stocks Directory module to find actively traded stocks across global markets.