Correlation Between Toncoin and LUNC

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

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

Diversification Opportunities for Toncoin and LUNC

0.9

Correlation Coefficient

Toncoin  LUNC

Almost no diversification

The 3 months correlation between Toncoin and LUNC is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Toncoin and LUNC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LUNC and Toncoin 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 Toncoin are associated (or correlated) with LUNC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LUNC has no effect on the direction of Toncoin i.e., Toncoin and LUNC go up and down completely randomly.

Pair Corralation between Toncoin and LUNC

Assuming the 90 days trading horizon Toncoin is expected to generate 1.02 times more return on investment than LUNC. However, Toncoin is 1.02 times more volatile than LUNC. It trades about -0.1 of its potential returns per unit of risk. LUNC is currently generating about -0.17 per unit of risk. If you would invest  550.00  in Toncoin on December 30, 2024 and sell it today you would lose (181.00) from holding Toncoin or give up 32.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Toncoin  vs.  LUNC

Toncoin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Toncoin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto'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 Toncoin shareholders.

LUNC

Risk-Adjusted Performance

Very Weak

Over the last 90 days LUNC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental 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 LUNC shareholders.

Pair Trading with Toncoin and LUNC

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

The idea behind Toncoin and LUNC 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.

Check out your portfolio center.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .