Correlation Between PLAYMATES TOYS and FUTURE GAMING
Can any of the company-specific risk be diversified away by investing in both PLAYMATES TOYS and FUTURE GAMING 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 FUTURE GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYMATES TOYS and FUTURE GAMING GRP, you can compare the effects of market volatilities on PLAYMATES TOYS and FUTURE GAMING 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 FUTURE GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYMATES TOYS and FUTURE GAMING.
Diversification Opportunities for PLAYMATES TOYS and FUTURE GAMING
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PLAYMATES and FUTURE is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding PLAYMATES TOYS and FUTURE GAMING GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUTURE GAMING GRP 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 FUTURE GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUTURE GAMING GRP has no effect on the direction of PLAYMATES TOYS i.e., PLAYMATES TOYS and FUTURE GAMING go up and down completely randomly.
Pair Corralation between PLAYMATES TOYS and FUTURE GAMING
Assuming the 90 days trading horizon PLAYMATES TOYS is expected to generate 0.58 times more return on investment than FUTURE GAMING. However, PLAYMATES TOYS is 1.71 times less risky than FUTURE GAMING. It trades about -0.06 of its potential returns per unit of risk. FUTURE GAMING GRP is currently generating about -0.08 per unit of risk. If you would invest 6.90 in PLAYMATES TOYS on September 14, 2024 and sell it today you would lose (0.30) from holding PLAYMATES TOYS or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYMATES TOYS vs. FUTURE GAMING GRP
Performance |
| Timeline |
| PLAYMATES TOYS |
| FUTURE GAMING GRP |
PLAYMATES TOYS and FUTURE GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYMATES TOYS and FUTURE GAMING
The main advantage of trading using opposite PLAYMATES TOYS and FUTURE GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYMATES TOYS position performs unexpectedly, FUTURE GAMING 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 FUTURE GAMING will offset losses from the drop in FUTURE GAMING's long position.| PLAYMATES TOYS vs. GALENA MINING LTD | PLAYMATES TOYS vs. LION ONE METALS | PLAYMATES TOYS vs. ASSOC BR FOODS | PLAYMATES TOYS vs. TYSON FOODS A |
| FUTURE GAMING vs. Scientific Games | FUTURE GAMING vs. International Game Technology | FUTURE GAMING vs. Superior Plus Corp | FUTURE GAMING vs. SIVERS SEMICONDUCTORS AB |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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