Correlation Between PLAYMATES TOYS and FIRST SHIP
Can any of the company-specific risk be diversified away by investing in both PLAYMATES TOYS and FIRST SHIP 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 FIRST SHIP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYMATES TOYS and FIRST SHIP LEASE, you can compare the effects of market volatilities on PLAYMATES TOYS and FIRST SHIP 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 FIRST SHIP. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYMATES TOYS and FIRST SHIP.
Diversification Opportunities for PLAYMATES TOYS and FIRST SHIP
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PLAYMATES and FIRST is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding PLAYMATES TOYS and FIRST SHIP LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST SHIP LEASE 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 FIRST SHIP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST SHIP LEASE has no effect on the direction of PLAYMATES TOYS i.e., PLAYMATES TOYS and FIRST SHIP go up and down completely randomly.
Pair Corralation between PLAYMATES TOYS and FIRST SHIP
Assuming the 90 days trading horizon PLAYMATES TOYS is expected to generate 3.1 times more return on investment than FIRST SHIP. However, PLAYMATES TOYS is 3.1 times more volatile than FIRST SHIP LEASE. It trades about 0.11 of its potential returns per unit of risk. FIRST SHIP LEASE is currently generating about -0.02 per unit of risk. If you would invest 6.20 in PLAYMATES TOYS on November 3, 2024 and sell it today you would earn a total of 0.70 from holding PLAYMATES TOYS or generate 11.29% 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. FIRST SHIP LEASE
Performance |
| Timeline |
| PLAYMATES TOYS |
| FIRST SHIP LEASE |
PLAYMATES TOYS and FIRST SHIP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYMATES TOYS and FIRST SHIP
The main advantage of trading using opposite PLAYMATES TOYS and FIRST SHIP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYMATES TOYS position performs unexpectedly, FIRST SHIP 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 FIRST SHIP will offset losses from the drop in FIRST SHIP's long position.| PLAYMATES TOYS vs. Choice Hotels International | PLAYMATES TOYS vs. alstria office REIT AG | PLAYMATES TOYS vs. CDL INVESTMENT | PLAYMATES TOYS vs. Wyndham Hotels Resorts |
| FIRST SHIP vs. BROADSTNET LEADL 00025 | FIRST SHIP vs. ADRIATIC METALS LS 013355 | FIRST SHIP vs. MAGNUM MINING EXP | FIRST SHIP vs. Yuexiu Transport Infrastructure |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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