Correlation Between Tokyu Construction and Ming Le

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

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

Diversification Opportunities for Tokyu Construction and Ming Le

0.1

Correlation Coefficient

Tokyu Construction  Ming Le

Average diversification

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

Pair Corralation between Tokyu Construction and Ming Le

Assuming the 90 days horizon Tokyu Construction Co is expected to generate 0.45 times more return on investment than Ming Le. However, Tokyu Construction Co is 2.21 times less risky than Ming Le. It trades about 0.16 of its potential returns per unit of risk. Ming Le Sports is currently generating about 0.02 per unit of risk. If you would invest  500.00  in Tokyu Construction Co on April 24, 2025 and sell it today you would earn a total of  80.00  from holding Tokyu Construction Co or generate 16.0% return on investment over 90 days.

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

Tokyu Construction Co  vs.  Ming Le Sports

Tokyu Construction

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tokyu Construction Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Tokyu Construction reported solid returns over the last few months and may actually be approaching a breakup point.

Ming Le Sports

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ming Le Sports are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Ming Le is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Tokyu Construction and Ming Le

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

The idea behind Tokyu Construction Co and Ming Le Sports 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.