Correlation Between PLAYMATES TOYS and Reinsurance Group
Can any of the company-specific risk be diversified away by investing in both PLAYMATES TOYS and Reinsurance Group 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 Reinsurance Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYMATES TOYS and Reinsurance Group of, you can compare the effects of market volatilities on PLAYMATES TOYS and Reinsurance Group 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 Reinsurance Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYMATES TOYS and Reinsurance Group.
Diversification Opportunities for PLAYMATES TOYS and Reinsurance Group
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PLAYMATES and Reinsurance is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding PLAYMATES TOYS and Reinsurance Group of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reinsurance Group 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 Reinsurance Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reinsurance Group has no effect on the direction of PLAYMATES TOYS i.e., PLAYMATES TOYS and Reinsurance Group go up and down completely randomly.
Pair Corralation between PLAYMATES TOYS and Reinsurance Group
Assuming the 90 days trading horizon PLAYMATES TOYS is expected to generate 3.41 times more return on investment than Reinsurance Group. However, PLAYMATES TOYS is 3.41 times more volatile than Reinsurance Group of. It trades about 0.08 of its potential returns per unit of risk. Reinsurance Group of is currently generating about 0.07 per unit of risk. If you would invest 1.43 in PLAYMATES TOYS on October 11, 2024 and sell it today you would earn a total of 5.17 from holding PLAYMATES TOYS or generate 361.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYMATES TOYS vs. Reinsurance Group of
Performance |
| Timeline |
| PLAYMATES TOYS |
| Reinsurance Group |
PLAYMATES TOYS and Reinsurance Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYMATES TOYS and Reinsurance Group
The main advantage of trading using opposite PLAYMATES TOYS and Reinsurance Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYMATES TOYS position performs unexpectedly, Reinsurance Group 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 Reinsurance Group will offset losses from the drop in Reinsurance Group's long position.| PLAYMATES TOYS vs. FIREWEED METALS P | PLAYMATES TOYS vs. THAI BEVERAGE | PLAYMATES TOYS vs. National Beverage Corp | PLAYMATES TOYS vs. ARDAGH METAL PACDL 0001 |
| Reinsurance Group vs. CAIRN HOMES EO | Reinsurance Group vs. JAPAN AIRLINES | Reinsurance Group vs. Neinor Homes SA | Reinsurance Group vs. Focus Home Interactive |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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