Correlation Between Tokyo Steel and ProFrac Holding

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

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

Diversification Opportunities for Tokyo Steel and ProFrac Holding

0.27

Correlation Coefficient

Tokyo Steel  ProFrac Holding

Modest diversification

The 3 months correlation between Tokyo and ProFrac is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Tokyo Steel Manufacturing and ProFrac Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProFrac Holding Corp and Tokyo Steel 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 Tokyo Steel Manufacturing are associated (or correlated) with ProFrac Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProFrac Holding Corp has no effect on the direction of Tokyo Steel i.e., Tokyo Steel and ProFrac Holding go up and down completely randomly.

Pair Corralation between Tokyo Steel and ProFrac Holding

Assuming the 90 days horizon Tokyo Steel Manufacturing is expected to generate 0.65 times more return on investment than ProFrac Holding. However, Tokyo Steel Manufacturing is 1.54 times less risky than ProFrac Holding. It trades about 0.04 of its potential returns per unit of risk. ProFrac Holding Corp is currently generating about 0.0 per unit of risk. If you would invest  576.00  in Tokyo Steel Manufacturing on September 13, 2025 and sell it today you would earn a total of  423.00  from holding Tokyo Steel Manufacturing or generate 73.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.21%
Values	Daily Returns

Tokyo Steel Manufacturing  vs.  ProFrac Holding Corp

Tokyo Steel Manufacturing

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Tokyo Steel Manufacturing are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Tokyo Steel is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

ProFrac Holding Corp

Risk-Adjusted Performance

Mild

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

Pair Trading with Tokyo Steel and ProFrac Holding

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

The idea behind Tokyo Steel Manufacturing and ProFrac Holding Corp 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.

Check out your portfolio center.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.