Correlation Between PLAYMATES TOYS and Maire Tecnimont
Can any of the company-specific risk be diversified away by investing in both PLAYMATES TOYS and Maire Tecnimont 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 Maire Tecnimont into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYMATES TOYS and Maire Tecnimont SpA, you can compare the effects of market volatilities on PLAYMATES TOYS and Maire Tecnimont 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 Maire Tecnimont. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYMATES TOYS and Maire Tecnimont.
Diversification Opportunities for PLAYMATES TOYS and Maire Tecnimont
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PLAYMATES and Maire is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding PLAYMATES TOYS and Maire Tecnimont SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maire Tecnimont SpA 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 are associated (or correlated) with Maire Tecnimont. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maire Tecnimont SpA has no effect on the direction of PLAYMATES TOYS i.e., PLAYMATES TOYS and Maire Tecnimont go up and down completely randomly.
Pair Corralation between PLAYMATES TOYS and Maire Tecnimont
Assuming the 90 days trading horizon PLAYMATES TOYS is expected to under-perform the Maire Tecnimont. In addition to that, PLAYMATES TOYS is 1.86 times more volatile than Maire Tecnimont SpA. It trades about -0.06 of its total potential returns per unit of risk. Maire Tecnimont SpA is currently generating about 0.28 per unit of volatility. If you would invest 700.00 in Maire Tecnimont SpA on September 13, 2024 and sell it today you would earn a total of 70.00 from holding Maire Tecnimont SpA or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
PLAYMATES TOYS vs. Maire Tecnimont SpA
Performance |
| Timeline |
| PLAYMATES TOYS |
| Maire Tecnimont SpA |
PLAYMATES TOYS and Maire Tecnimont Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYMATES TOYS and Maire Tecnimont
The main advantage of trading using opposite PLAYMATES TOYS and Maire Tecnimont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYMATES TOYS position performs unexpectedly, Maire Tecnimont 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 Maire Tecnimont will offset losses from the drop in Maire Tecnimont's long position.| PLAYMATES TOYS vs. Apple Inc | PLAYMATES TOYS vs. Apple Inc | PLAYMATES TOYS vs. Apple Inc | PLAYMATES TOYS vs. Apple Inc |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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