Correlation Between Toncoin and BKK

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

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

Diversification Opportunities for Toncoin and BKK

0.31

Correlation Coefficient

Toncoin  BKK

Weak diversification

The 3 months correlation between Toncoin and BKK is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Toncoin and BKK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKK and Toncoin 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 Toncoin are associated (or correlated) with BKK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKK has no effect on the direction of Toncoin i.e., Toncoin and BKK go up and down completely randomly.

Pair Corralation between Toncoin and BKK

Assuming the 90 days trading horizon Toncoin is expected to generate 54.73 times more return on investment than BKK. However, Toncoin is 54.73 times more volatile than BKK. It trades about 0.16 of its potential returns per unit of risk. BKK is currently generating about 0.03 per unit of risk. If you would invest  477.00  in Toncoin on September 5, 2024 and sell it today you would earn a total of  212.00  from holding Toncoin or generate 44.44% return on investment over 90 days.

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

Toncoin  vs.  BKK

Toncoin

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Toncoin are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Toncoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

BKK

Risk-Adjusted Performance

2 of 100

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.

Pair Trading with Toncoin and BKK

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

The idea behind Toncoin and BKK 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.