Correlation Between Toya SA and 4Mass SA

Can any of the company-specific risk be diversified away by investing in both Toya SA and 4Mass SA 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 Toya SA and 4Mass SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Toya SA and 4Mass SA, you can compare the effects of market volatilities on Toya SA and 4Mass SA 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 Toya SA with a short position of 4Mass SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toya SA and 4Mass SA.

Diversification Opportunities for Toya SA and 4Mass SA

0.35

Correlation Coefficient

Toya SA  4Mass SA

Weak diversification

The 3 months correlation between Toya and 4Mass is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Toya SA and 4Mass SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4Mass SA and Toya SA 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 Toya SA are associated (or correlated) with 4Mass SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4Mass SA has no effect on the direction of Toya SA i.e., Toya SA and 4Mass SA go up and down completely randomly.

Pair Corralation between Toya SA and 4Mass SA

If you would invest (100.00) in 4Mass SA on October 7, 2024 and sell it today you would earn a total of  100.00  from holding 4Mass SA or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Toya SA  vs.  4Mass SA

Toya SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Toya SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Toya SA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

4Mass SA

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days 4Mass SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, 4Mass SA is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Toya SA and 4Mass SA

The main advantage of trading using opposite Toya SA and 4Mass SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toya SA position performs unexpectedly, 4Mass SA 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 4Mass SA will offset losses from the drop in 4Mass SA's long position.

The idea behind Toya SA and 4Mass SA 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.