Correlation Between Tokocrypto and Marlin

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

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

Diversification Opportunities for Tokocrypto and Marlin

0.88

Correlation Coefficient

Tokocrypto  Marlin

Very poor diversification

The 3 months correlation between Tokocrypto and Marlin is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Tokocrypto and Marlin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marlin and Tokocrypto 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 Tokocrypto are associated (or correlated) with Marlin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marlin has no effect on the direction of Tokocrypto i.e., Tokocrypto and Marlin go up and down completely randomly.

Pair Corralation between Tokocrypto and Marlin

Assuming the 90 days trading horizon Tokocrypto is expected to generate 1.68 times less return on investment than Marlin. But when comparing it to its historical volatility, Tokocrypto is 1.02 times less risky than Marlin. It trades about 0.03 of its potential returns per unit of risk. Marlin is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1.33  in Marlin on January 29, 2024 and sell it today you would earn a total of  0.81  from holding Marlin or generate 60.9% return on investment over 90 days.

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

Tokocrypto  vs.  Marlin

Tokocrypto

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tokocrypto are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Tokocrypto exhibited solid returns over the last few months and may actually be approaching a breakup point.

Marlin

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marlin are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Marlin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tokocrypto and Marlin

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

The idea behind Tokocrypto and Marlin 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.