Correlation Between TOTAL and Toro

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

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

Diversification Opportunities for TOTAL and Toro

0.21

Correlation Coefficient

TOTAL  Toro

Modest diversification

The 3 months correlation between TOTAL and Toro is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding TOTAL CAPITAL INTERNATIONAL and Toro Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toro and TOTAL 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 TOTAL CAPITAL INTERNATIONAL are associated (or correlated) with Toro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toro has no effect on the direction of TOTAL i.e., TOTAL and Toro go up and down completely randomly.

Pair Corralation between TOTAL and Toro

Assuming the 90 days trading horizon TOTAL CAPITAL INTERNATIONAL is expected to under-perform the Toro. In addition to that, TOTAL is 1.51 times more volatile than Toro Co. It trades about -0.12 of its total potential returns per unit of risk. Toro Co is currently generating about 0.08 per unit of volatility. If you would invest  8,330  in Toro Co on September 13, 2024 and sell it today you would earn a total of  514.00  from holding Toro Co or generate 6.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	79.37%
Values	Daily Returns

TOTAL CAPITAL INTERNATIONAL  vs.  Toro Co

TOTAL CAPITAL INTERN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TOTAL CAPITAL INTERNATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for TOTAL CAPITAL INTERNATIONAL investors.

Toro

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Toro Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Toro may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with TOTAL and Toro

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

The idea behind TOTAL CAPITAL INTERNATIONAL and Toro Co 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.