Correlation Between Toro and Bridgetown Holdings

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Can any of the company-specific risk be diversified away by investing in both Toro and Bridgetown Holdings 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 Bridgetown Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Toro Co and Bridgetown Holdings, you can compare the effects of market volatilities on Toro and Bridgetown Holdings 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 Bridgetown Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toro and Bridgetown Holdings.

Diversification Opportunities for Toro and Bridgetown Holdings

ToroBridgetownDiversified AwayToroBridgetownDiversified Away100%
0.29
  Correlation Coefficient

Modest diversification

The 3 months correlation between Toro and Bridgetown is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Toro Co and Bridgetown Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgetown Holdings 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 Bridgetown Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgetown Holdings has no effect on the direction of Toro i.e., Toro and Bridgetown Holdings go up and down completely randomly.

Pair Corralation between Toro and Bridgetown Holdings

If you would invest  8,132  in Toro Co on October 25, 2024 and sell it today you would earn a total of  296.00  from holding Toro Co or generate 3.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy1.67%
ValuesDaily Returns

Toro Co  vs.  Bridgetown Holdings

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -40-20020406080
JavaScript chart by amCharts 3.21.15TTC BTWNW
       Timeline  
Toro 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Toro Co are ranked lower than 3 (%) 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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan78808284868890
Bridgetown Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bridgetown Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Bridgetown Holdings is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Toro and Bridgetown Holdings Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.76-3.57-2.37-1.180.011.182.363.564.765.96 0.050.100.15
JavaScript chart by amCharts 3.21.15TTC BTWNW
       Returns  

Pair Trading with Toro and Bridgetown Holdings

The main advantage of trading using opposite Toro and Bridgetown Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toro position performs unexpectedly, Bridgetown Holdings 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 Bridgetown Holdings will offset losses from the drop in Bridgetown Holdings' long position.
The idea behind Toro Co and Bridgetown Holdings 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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