Correlation Between Toro and BitFuFu

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

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

Diversification Opportunities for Toro and BitFuFu

0.14

Correlation Coefficient

Toro  BitFuFu

Average diversification

The 3 months correlation between Toro and BitFuFu is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Toro Co and BitFuFu Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFuFu 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 BitFuFu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFuFu Class A has no effect on the direction of Toro i.e., Toro and BitFuFu go up and down completely randomly.

Pair Corralation between Toro and BitFuFu

Considering the 90-day investment horizon Toro Co is expected to under-perform the BitFuFu. But the stock apears to be less risky and, when comparing its historical volatility, Toro Co is 4.19 times less risky than BitFuFu. The stock trades about -0.31 of its potential returns per unit of risk. The BitFuFu Class A is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  547.00  in BitFuFu Class A on October 11, 2024 and sell it today you would lose (9.00) from holding BitFuFu Class A or give up 1.65% of portfolio value over 90 days.

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

Toro Co  vs.  BitFuFu Class A

Toro

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Toro Co has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

BitFuFu Class A

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BitFuFu Class A are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, BitFuFu unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Toro and BitFuFu

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

The idea behind Toro Co and BitFuFu 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.