Correlation Between Toncoin and DATA

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

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

Diversification Opportunities for Toncoin and DATA

0.92

Correlation Coefficient

Toncoin  DATA

Almost no diversification

The 3 months correlation between Toncoin and DATA is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Toncoin and DATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATA 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 DATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATA has no effect on the direction of Toncoin i.e., Toncoin and DATA go up and down completely randomly.

Pair Corralation between Toncoin and DATA

Assuming the 90 days trading horizon Toncoin is expected to generate 4.59 times less return on investment than DATA. But when comparing it to its historical volatility, Toncoin is 1.47 times less risky than DATA. It trades about 0.03 of its potential returns per unit of risk. DATA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3.79  in DATA on September 12, 2024 and sell it today you would earn a total of  0.97  from holding DATA or generate 25.59% return on investment over 90 days.

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

Toncoin  vs.  DATA

Toncoin

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Toncoin are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Toncoin may actually be approaching a critical reversion point that can send shares even higher in January 2025.

DATA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DATA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, DATA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Toncoin and DATA

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

The idea behind Toncoin and DATA 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.