Correlation Between Summit Therapeutics and TOYO Co,

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

By analyzing existing cross correlation between Summit Therapeutics PLC and TOYO Co, Ltd, you can compare the effects of market volatilities on Summit Therapeutics and TOYO Co, 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 Summit Therapeutics with a short position of TOYO Co,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Therapeutics and TOYO Co,.

Diversification Opportunities for Summit Therapeutics and TOYO Co,

-0.29

Correlation Coefficient

Summit Therapeutics  TOYO Co,

Very good diversification

The 3 months correlation between Summit and TOYO is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Summit Therapeutics PLC and TOYO Co, Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOYO Co, and Summit Therapeutics 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 Summit Therapeutics PLC are associated (or correlated) with TOYO Co,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOYO Co, has no effect on the direction of Summit Therapeutics i.e., Summit Therapeutics and TOYO Co, go up and down completely randomly.

Pair Corralation between Summit Therapeutics and TOYO Co,

Given the investment horizon of 90 days Summit Therapeutics is expected to generate 174.04 times less return on investment than TOYO Co,. But when comparing it to its historical volatility, Summit Therapeutics PLC is 5.33 times less risky than TOYO Co,. It trades about 0.0 of its potential returns per unit of risk. TOYO Co, Ltd is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  295.00  in TOYO Co, Ltd on September 21, 2024 and sell it today you would earn a total of  62.00  from holding TOYO Co, Ltd or generate 21.02% return on investment over 90 days.

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

Summit Therapeutics PLC  vs.  TOYO Co, Ltd

Summit Therapeutics PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Summit Therapeutics PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

TOYO Co,

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TOYO Co, Ltd are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, TOYO Co, displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Summit Therapeutics and TOYO Co,

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

The idea behind Summit Therapeutics PLC and TOYO Co, Ltd 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.