Correlation Between Toncoin and Clearpool

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

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

Diversification Opportunities for Toncoin and Clearpool

0.1

Correlation Coefficient

Toncoin  Clearpool

Average diversification

The 3 months correlation between Toncoin and Clearpool is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Toncoin and Clearpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearpool 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 Clearpool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearpool has no effect on the direction of Toncoin i.e., Toncoin and Clearpool go up and down completely randomly.

Pair Corralation between Toncoin and Clearpool

Assuming the 90 days trading horizon Toncoin is expected to generate 25.11 times less return on investment than Clearpool. But when comparing it to its historical volatility, Toncoin is 30.92 times less risky than Clearpool. It trades about 0.16 of its potential returns per unit of risk. Clearpool is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  10.00  in Clearpool on September 5, 2024 and sell it today you would earn a total of  23.00  from holding Clearpool or generate 230.0% return on investment over 90 days.

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

Toncoin  vs.  Clearpool

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.

Clearpool

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clearpool are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Clearpool exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Toncoin and Clearpool

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

The idea behind Toncoin and Clearpool 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.

Check out your portfolio center.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.