Correlation Between PLAYMATES TOYS and UNITED UTILITIES
Can any of the company-specific risk be diversified away by investing in both PLAYMATES TOYS and UNITED UTILITIES 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 UNITED UTILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYMATES TOYS and UNITED UTILITIES GR, you can compare the effects of market volatilities on PLAYMATES TOYS and UNITED UTILITIES 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 UNITED UTILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYMATES TOYS and UNITED UTILITIES.
Diversification Opportunities for PLAYMATES TOYS and UNITED UTILITIES
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between PLAYMATES and UNITED is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding PLAYMATES TOYS and UNITED UTILITIES GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED UTILITIES 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 UNITED UTILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED UTILITIES has no effect on the direction of PLAYMATES TOYS i.e., PLAYMATES TOYS and UNITED UTILITIES go up and down completely randomly.
Pair Corralation between PLAYMATES TOYS and UNITED UTILITIES
Assuming the 90 days trading horizon PLAYMATES TOYS is expected to under-perform the UNITED UTILITIES. In addition to that, PLAYMATES TOYS is 2.05 times more volatile than UNITED UTILITIES GR. It trades about -0.06 of its total potential returns per unit of risk. UNITED UTILITIES GR is currently generating about 0.16 per unit of volatility. If you would invest 1,234 in UNITED UTILITIES GR on September 14, 2024 and sell it today you would earn a total of 56.00 from holding UNITED UTILITIES GR or generate 4.54% 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. UNITED UTILITIES GR
Performance |
| Timeline |
| PLAYMATES TOYS |
| UNITED UTILITIES |
PLAYMATES TOYS and UNITED UTILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYMATES TOYS and UNITED UTILITIES
The main advantage of trading using opposite PLAYMATES TOYS and UNITED UTILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYMATES TOYS position performs unexpectedly, UNITED UTILITIES 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 UNITED UTILITIES will offset losses from the drop in UNITED UTILITIES'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 |
| UNITED UTILITIES vs. National Retail Properties | UNITED UTILITIES vs. QURATE RETAIL INC | UNITED UTILITIES vs. Sumitomo Rubber Industries | UNITED UTILITIES vs. GOODYEAR T RUBBER |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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