Correlation Between TOA PAINT and ALL ENERGY

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

By analyzing existing cross correlation between TOA PAINT and ALL ENERGY UTILITIES, you can compare the effects of market volatilities on TOA PAINT and ALL ENERGY 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 TOA PAINT with a short position of ALL ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOA PAINT and ALL ENERGY.

Diversification Opportunities for TOA PAINT and ALL ENERGY

0.73

Correlation Coefficient

TOA PAINT  ALL ENERGY

Poor diversification

The 3 months correlation between TOA and ALL is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding TOA PAINT and ALL ENERGY UTILITIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALL ENERGY UTILITIES and TOA PAINT 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 TOA PAINT are associated (or correlated) with ALL ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALL ENERGY UTILITIES has no effect on the direction of TOA PAINT i.e., TOA PAINT and ALL ENERGY go up and down completely randomly.

Pair Corralation between TOA PAINT and ALL ENERGY

Assuming the 90 days trading horizon TOA PAINT is expected to generate 0.4 times more return on investment than ALL ENERGY. However, TOA PAINT is 2.51 times less risky than ALL ENERGY. It trades about -0.07 of its potential returns per unit of risk. ALL ENERGY UTILITIES is currently generating about -0.16 per unit of risk. If you would invest  1,434  in TOA PAINT on December 20, 2024 and sell it today you would lose (174.00) from holding TOA PAINT or give up 12.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

TOA PAINT  vs.  ALL ENERGY UTILITIES

TOA PAINT

Risk-Adjusted Performance

Very Weak

Over the last 90 days TOA PAINT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

ALL ENERGY UTILITIES

Risk-Adjusted Performance

Very Weak

Over the last 90 days ALL ENERGY UTILITIES has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with TOA PAINT and ALL ENERGY

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

The idea behind TOA PAINT and ALL ENERGY UTILITIES 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.