Correlation Between Berli Jucker and TOA Paint

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

By analyzing existing cross correlation between Berli Jucker Public and TOA Paint Public, you can compare the effects of market volatilities on Berli Jucker and TOA Paint 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 Berli Jucker with a short position of TOA Paint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berli Jucker and TOA Paint.

Diversification Opportunities for Berli Jucker and TOA Paint

0.5

Correlation Coefficient

Berli Jucker  TOA Paint

Very weak diversification

The 3 months correlation between Berli and TOA is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Berli Jucker Public and TOA Paint Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOA Paint Public and Berli Jucker 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 Berli Jucker Public are associated (or correlated) with TOA Paint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOA Paint Public has no effect on the direction of Berli Jucker i.e., Berli Jucker and TOA Paint go up and down completely randomly.

Pair Corralation between Berli Jucker and TOA Paint

Assuming the 90 days trading horizon Berli Jucker Public is expected to generate 1.04 times more return on investment than TOA Paint. However, Berli Jucker is 1.04 times more volatile than TOA Paint Public. It trades about -0.04 of its potential returns per unit of risk. TOA Paint Public is currently generating about -0.08 per unit of risk. If you would invest  3,323  in Berli Jucker Public on September 12, 2024 and sell it today you would lose (883.00) from holding Berli Jucker Public or give up 26.57% of portfolio value over 90 days.

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

Berli Jucker Public  vs.  TOA Paint Public

Berli Jucker Public

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Berli Jucker Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Berli Jucker is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

TOA Paint Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TOA Paint Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Berli Jucker and TOA Paint

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

The idea behind Berli Jucker Public and TOA Paint Public 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.