Correlation Between BKK and Tokocrypto

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

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

Diversification Opportunities for BKK and Tokocrypto

-0.14

Correlation Coefficient

BKK  Tokocrypto

Good diversification

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

Pair Corralation between BKK and Tokocrypto

Assuming the 90 days trading horizon BKK is expected to generate 315.11 times less return on investment than Tokocrypto. But when comparing it to its historical volatility, BKK is 77.23 times less risky than Tokocrypto. It trades about 0.03 of its potential returns per unit of risk. Tokocrypto is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  29.00  in Tokocrypto on September 2, 2024 and sell it today you would earn a total of  10.00  from holding Tokocrypto or generate 34.48% return on investment over 90 days.

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

BKK  vs.  Tokocrypto

BKK

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BKK are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward-looking signals, BKK is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Tokocrypto

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tokocrypto are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Tokocrypto exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BKK and Tokocrypto

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

The idea behind BKK and Tokocrypto 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.