Correlation Between Toncoin and SENC

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

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

Diversification Opportunities for Toncoin and SENC

0.22

Correlation Coefficient

Toncoin  SENC

Modest diversification

The 3 months correlation between Toncoin and SENC is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Toncoin and SENC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENC 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 SENC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENC has no effect on the direction of Toncoin i.e., Toncoin and SENC go up and down completely randomly.

Pair Corralation between Toncoin and SENC

Assuming the 90 days trading horizon Toncoin is expected to generate 1.73 times less return on investment than SENC. But when comparing it to its historical volatility, Toncoin is 3.22 times less risky than SENC. It trades about 0.09 of its potential returns per unit of risk. SENC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.03  in SENC on September 12, 2024 and sell it today you would earn a total of  0.00  from holding SENC or generate 1.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	50.3%
Values	Daily Returns

Toncoin  vs.  SENC

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.

SENC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SENC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, SENC 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 SENC

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

The idea behind Toncoin and SENC 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 Transaction History module to view history of all your transactions and understand their impact on performance.