Correlation Between Toro and MOGU

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

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

Diversification Opportunities for Toro and MOGU

-0.05

Correlation Coefficient

Toro  MOGU

Good diversification

The 3 months correlation between Toro and MOGU is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Toro Co and MOGU Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOGU Inc 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 MOGU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOGU Inc has no effect on the direction of Toro i.e., Toro and MOGU go up and down completely randomly.

Pair Corralation between Toro and MOGU

Considering the 90-day investment horizon Toro Co is expected to under-perform the MOGU. But the stock apears to be less risky and, when comparing its historical volatility, Toro Co is 3.07 times less risky than MOGU. The stock trades about -0.32 of its potential returns per unit of risk. The MOGU Inc is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  205.00  in MOGU Inc on October 10, 2024 and sell it today you would earn a total of  26.00  from holding MOGU Inc or generate 12.68% return on investment over 90 days.

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

Toro Co  vs.  MOGU Inc

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.

MOGU Inc

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MOGU Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal technical and fundamental indicators, MOGU unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Toro and MOGU

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

The idea behind Toro Co and MOGU Inc 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.