Correlation Between Toast and Roblox Corp

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

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

Diversification Opportunities for Toast and Roblox Corp

0.68

Correlation Coefficient

Toast  Roblox Corp

Poor diversification

The 3 months correlation between Toast and Roblox is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Toast Inc and Roblox Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roblox Corp and Toast 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 Toast Inc are associated (or correlated) with Roblox Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roblox Corp has no effect on the direction of Toast i.e., Toast and Roblox Corp go up and down completely randomly.

Pair Corralation between Toast and Roblox Corp

Given the investment horizon of 90 days Toast Inc is expected to under-perform the Roblox Corp. But the stock apears to be less risky and, when comparing its historical volatility, Toast Inc is 1.3 times less risky than Roblox Corp. The stock trades about -0.02 of its potential returns per unit of risk. The Roblox Corp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  8,171  in Roblox Corp on May 20, 2025 and sell it today you would earn a total of  3,824  from holding Roblox Corp or generate 46.8% return on investment over 90 days.

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

Toast Inc  vs.  Roblox Corp

Toast Inc

Risk-Adjusted Performance

Weakest

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

Roblox Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Roblox Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Roblox Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Toast and Roblox Corp

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

The idea behind Toast Inc and Roblox 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.