Correlation Between ABG Acquisition and Toro

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

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

Diversification Opportunities for ABG Acquisition and Toro

0.0

Correlation Coefficient

ABG Acquisition  Toro

Pay attention - limited upside

The 3 months correlation between ABG and Toro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ABG Acquisition I and Toro Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toro and ABG Acquisition 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 ABG Acquisition I are associated (or correlated) with Toro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toro has no effect on the direction of ABG Acquisition i.e., ABG Acquisition and Toro go up and down completely randomly.

Pair Corralation between ABG Acquisition and Toro

If you would invest (100.00) in ABG Acquisition I on December 17, 2024 and sell it today you would earn a total of  100.00  from holding ABG Acquisition I or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ABG Acquisition I  vs.  Toro Co

ABG Acquisition I

Risk-Adjusted Performance

Very Weak

Over the last 90 days ABG Acquisition I has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, ABG Acquisition is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Toro

Risk-Adjusted Performance

Very Weak

Over the last 90 days Toro Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with ABG Acquisition and Toro

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

The idea behind ABG Acquisition I and Toro 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.