Correlation Between Topkey Corp and Alexander Marine

Can any of the company-specific risk be diversified away by investing in both Topkey Corp and Alexander Marine 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 Topkey Corp and Alexander Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Topkey Corp and Alexander Marine Co, you can compare the effects of market volatilities on Topkey Corp and Alexander Marine 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 Topkey Corp with a short position of Alexander Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Topkey Corp and Alexander Marine.

Diversification Opportunities for Topkey Corp and Alexander Marine

-0.38

Correlation Coefficient

Topkey Corp  Alexander Marine

Very good diversification

The 3 months correlation between Topkey and Alexander is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Topkey Corp and Alexander Marine Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexander Marine and Topkey Corp 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 Topkey Corp are associated (or correlated) with Alexander Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexander Marine has no effect on the direction of Topkey Corp i.e., Topkey Corp and Alexander Marine go up and down completely randomly.

Pair Corralation between Topkey Corp and Alexander Marine

Assuming the 90 days trading horizon Topkey Corp is expected to generate 0.81 times more return on investment than Alexander Marine. However, Topkey Corp is 1.23 times less risky than Alexander Marine. It trades about -0.17 of its potential returns per unit of risk. Alexander Marine Co is currently generating about -0.27 per unit of risk. If you would invest  21,300  in Topkey Corp on December 30, 2024 and sell it today you would lose (1,200) from holding Topkey Corp or give up 5.63% of portfolio value over 90 days.

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

Topkey Corp  vs.  Alexander Marine Co

Topkey Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Topkey Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Topkey Corp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Alexander Marine

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alexander Marine 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 April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Topkey Corp and Alexander Marine

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

The idea behind Topkey Corp and Alexander Marine 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.