Correlation Between Toncoin and TRB

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

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

Diversification Opportunities for Toncoin and TRB

0.87

Correlation Coefficient

Toncoin  TRB

Very poor diversification

The 3 months correlation between Toncoin and TRB is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Toncoin and TRB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRB 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 TRB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRB has no effect on the direction of Toncoin i.e., Toncoin and TRB go up and down completely randomly.

Pair Corralation between Toncoin and TRB

Assuming the 90 days trading horizon Toncoin is expected to generate 0.56 times more return on investment than TRB. However, Toncoin is 1.78 times less risky than TRB. It trades about 0.01 of its potential returns per unit of risk. TRB is currently generating about -0.01 per unit of risk. If you would invest  513.00  in Toncoin on October 23, 2024 and sell it today you would lose (11.00) from holding Toncoin or give up 2.14% of portfolio value over 90 days.

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

Toncoin  vs.  TRB

Toncoin

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Toncoin are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Toncoin is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

TRB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TRB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, TRB is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Toncoin and TRB

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

The idea behind Toncoin and TRB 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.