Correlation Between PLAYMATES TOYS and Easy Software
Can any of the company-specific risk be diversified away by investing in both PLAYMATES TOYS and Easy Software 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 Easy Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYMATES TOYS and Easy Software AG, you can compare the effects of market volatilities on PLAYMATES TOYS and Easy Software 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 Easy Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYMATES TOYS and Easy Software.
Diversification Opportunities for PLAYMATES TOYS and Easy Software
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between PLAYMATES and Easy is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding PLAYMATES TOYS and Easy Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easy Software AG 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 Easy Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easy Software AG has no effect on the direction of PLAYMATES TOYS i.e., PLAYMATES TOYS and Easy Software go up and down completely randomly.
Pair Corralation between PLAYMATES TOYS and Easy Software
Assuming the 90 days trading horizon PLAYMATES TOYS is expected to generate 2.72 times more return on investment than Easy Software. However, PLAYMATES TOYS is 2.72 times more volatile than Easy Software AG. It trades about 0.06 of its potential returns per unit of risk. Easy Software AG is currently generating about 0.06 per unit of risk. If you would invest 5.05 in PLAYMATES TOYS on October 17, 2024 and sell it today you would earn a total of 1.55 from holding PLAYMATES TOYS or generate 30.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYMATES TOYS vs. Easy Software AG
Performance |
| Timeline |
| PLAYMATES TOYS |
| Easy Software AG |
PLAYMATES TOYS and Easy Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYMATES TOYS and Easy Software
The main advantage of trading using opposite PLAYMATES TOYS and Easy Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYMATES TOYS position performs unexpectedly, Easy Software 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 Easy Software will offset losses from the drop in Easy Software's long position.| PLAYMATES TOYS vs. Apple Inc | PLAYMATES TOYS vs. Apple Inc | PLAYMATES TOYS vs. Apple Inc | PLAYMATES TOYS vs. Apple Inc |
| Easy Software vs. International Game Technology | Easy Software vs. Seven West Media | Easy Software vs. Hochschild Mining plc | Easy Software vs. PLAYMATES TOYS |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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