Correlation Between Toro and Apollomics

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

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

Diversification Opportunities for Toro and Apollomics

-0.43

Correlation Coefficient

Toro  Apollomics

Very good diversification

The 3 months correlation between Toro and Apollomics is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Toro Co and Apollomics Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollomics Class A and Toro 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 Toro Co are associated (or correlated) with Apollomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollomics Class A has no effect on the direction of Toro i.e., Toro and Apollomics go up and down completely randomly.

Pair Corralation between Toro and Apollomics

Considering the 90-day investment horizon Toro is expected to generate 8.95 times less return on investment than Apollomics. But when comparing it to its historical volatility, Toro Co is 10.53 times less risky than Apollomics. It trades about 0.03 of its potential returns per unit of risk. Apollomics Class A is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,330  in Apollomics Class A on October 24, 2024 and sell it today you would lose (378.00) from holding Apollomics Class A or give up 28.42% of portfolio value over 90 days.

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

Toro Co  vs.  Apollomics Class A

Toro

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Toro Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Toro is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Apollomics Class A

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apollomics Class A are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent essential indicators, Apollomics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Toro and Apollomics

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

The idea behind Toro Co and Apollomics Class A 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..