Correlation Between Toll Brothers and American Video

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

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

Diversification Opportunities for Toll Brothers and American Video

0.0

Correlation Coefficient

Toll Brothers  American Video

Pay attention - limited upside

The 3 months correlation between Toll and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Toll Brothers and American Video Teleconferencin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Video Telec and Toll Brothers 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 Toll Brothers are associated (or correlated) with American Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Video Telec has no effect on the direction of Toll Brothers i.e., Toll Brothers and American Video go up and down completely randomly.

Pair Corralation between Toll Brothers and American Video

If you would invest  12,022  in Toll Brothers on February 12, 2024 and sell it today you would earn a total of  680.00  from holding Toll Brothers or generate 5.66% return on investment over 90 days.

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

Toll Brothers  vs.  American Video Teleconferencin

Toll Brothers

Risk-Adjusted Performance

12 of 100

Good

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

American Video Telec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Video Teleconferencing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, American Video is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Toll Brothers and American Video

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

The idea behind Toll Brothers and American Video Teleconferencing 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.