Correlation Between PLAYMATES TOYS and Winnebago Industries
Can any of the company-specific risk be diversified away by investing in both PLAYMATES TOYS and Winnebago Industries 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 Winnebago Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYMATES TOYS and Winnebago Industries, you can compare the effects of market volatilities on PLAYMATES TOYS and Winnebago Industries 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 Winnebago Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYMATES TOYS and Winnebago Industries.
Diversification Opportunities for PLAYMATES TOYS and Winnebago Industries
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between PLAYMATES and Winnebago is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding PLAYMATES TOYS and Winnebago Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winnebago Industries 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 Winnebago Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winnebago Industries has no effect on the direction of PLAYMATES TOYS i.e., PLAYMATES TOYS and Winnebago Industries go up and down completely randomly.
Pair Corralation between PLAYMATES TOYS and Winnebago Industries
Assuming the 90 days trading horizon PLAYMATES TOYS is expected to generate 2.25 times more return on investment than Winnebago Industries. However, PLAYMATES TOYS is 2.25 times more volatile than Winnebago Industries. It trades about 0.07 of its potential returns per unit of risk. Winnebago Industries is currently generating about 0.03 per unit of risk. If you would invest 6.20 in PLAYMATES TOYS on November 1, 2024 and sell it today you would earn a total of 0.30 from holding PLAYMATES TOYS or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
PLAYMATES TOYS vs. Winnebago Industries
Performance |
| Timeline |
| PLAYMATES TOYS |
| Winnebago Industries |
PLAYMATES TOYS and Winnebago Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYMATES TOYS and Winnebago Industries
The main advantage of trading using opposite PLAYMATES TOYS and Winnebago Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYMATES TOYS position performs unexpectedly, Winnebago Industries 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 Winnebago Industries will offset losses from the drop in Winnebago Industries' long position.| PLAYMATES TOYS vs. United Natural Foods | PLAYMATES TOYS vs. PREMIER FOODS | PLAYMATES TOYS vs. Hanison Construction Holdings | PLAYMATES TOYS vs. CAL MAINE FOODS |
| Winnebago Industries vs. PLAYMATES TOYS | Winnebago Industries vs. 24SEVENOFFICE GROUP AB | Winnebago Industries vs. Playa Hotels Resorts | Winnebago Industries vs. TRAVEL LEISURE DL 01 |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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