Correlation Between Techtronic Industries and Toughbuilt Industries

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

By analyzing existing cross correlation between Techtronic Industries Ltd and Toughbuilt Industries, you can compare the effects of market volatilities on Techtronic Industries and Toughbuilt Industries 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 Techtronic Industries with a short position of Toughbuilt Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techtronic Industries and Toughbuilt Industries.

Diversification Opportunities for Techtronic Industries and Toughbuilt Industries

0.0

Correlation Coefficient

Techtronic Industries  Toughbuilt Industries

Pay attention - limited upside

The 3 months correlation between Techtronic and Toughbuilt is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Techtronic Industries Ltd and Toughbuilt Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toughbuilt Industries and Techtronic Industries 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 Techtronic Industries Ltd are associated (or correlated) with Toughbuilt Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toughbuilt Industries has no effect on the direction of Techtronic Industries i.e., Techtronic Industries and Toughbuilt Industries go up and down completely randomly.

Pair Corralation between Techtronic Industries and Toughbuilt Industries

If you would invest  7,051  in Techtronic Industries Ltd on December 1, 2024 and sell it today you would lose (71.00) from holding Techtronic Industries Ltd or give up 1.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Techtronic Industries Ltd  vs.  Toughbuilt Industries

Techtronic Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Techtronic Industries Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Techtronic Industries is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Toughbuilt Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Toughbuilt Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Toughbuilt Industries is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Techtronic Industries and Toughbuilt Industries

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

The idea behind Techtronic Industries Ltd and Toughbuilt Industries 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.