Correlation Between Playmates Toys and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both Playmates Toys and Ebro Foods 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 Playmates Toys and Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playmates Toys Limited and Ebro Foods SA, you can compare the effects of market volatilities on Playmates Toys and Ebro Foods 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 Playmates Toys with a short position of Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playmates Toys and Ebro Foods.
Diversification Opportunities for Playmates Toys and Ebro Foods
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Playmates and Ebro is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Playmates Toys Limited and Ebro Foods SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods SA and Playmates Toys 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 Playmates Toys Limited are associated (or correlated) with Ebro Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebro Foods SA has no effect on the direction of Playmates Toys i.e., Playmates Toys and Ebro Foods go up and down completely randomly.
Pair Corralation between Playmates Toys and Ebro Foods
Assuming the 90 days horizon Playmates Toys Limited is expected to generate 10.61 times more return on investment than Ebro Foods. However, Playmates Toys is 10.61 times more volatile than Ebro Foods SA. It trades about 0.04 of its potential returns per unit of risk. Ebro Foods SA is currently generating about -0.05 per unit of risk. If you would invest 6.40 in Playmates Toys Limited on October 30, 2024 and sell it today you would earn a total of 0.10 from holding Playmates Toys Limited or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playmates Toys Limited vs. Ebro Foods SA
Performance |
| Timeline |
| Playmates Toys |
| Ebro Foods SA |
Playmates Toys and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playmates Toys and Ebro Foods
The main advantage of trading using opposite Playmates Toys and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playmates Toys position performs unexpectedly, Ebro Foods 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 Ebro Foods will offset losses from the drop in Ebro Foods' long position.| Playmates Toys vs. Booking Holdings | Playmates Toys vs. Oriental Land Co | Playmates Toys vs. ANTA Sports Products | Playmates Toys vs. Li Ning Company |
| Ebro Foods vs. MAGNUM MINING EXP | Ebro Foods vs. ETFS Coffee ETC | Ebro Foods vs. SALESFORCE INC CDR | Ebro Foods vs. GungHo Online Entertainment |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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