Correlation Between SBA Communications and HASBRO INC
Can any of the company-specific risk be diversified away by investing in both SBA Communications and HASBRO INC 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 SBA Communications and HASBRO INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBA Communications Corp and HASBRO INC, you can compare the effects of market volatilities on SBA Communications and HASBRO INC 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 SBA Communications with a short position of HASBRO INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBA Communications and HASBRO INC.
Diversification Opportunities for SBA Communications and HASBRO INC
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SBA and HASBRO is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SBA Communications Corp and HASBRO INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HASBRO INC and SBA Communications 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 SBA Communications Corp are associated (or correlated) with HASBRO INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HASBRO INC has no effect on the direction of SBA Communications i.e., SBA Communications and HASBRO INC go up and down completely randomly.
Pair Corralation between SBA Communications and HASBRO INC
Assuming the 90 days trading horizon SBA Communications Corp is expected to under-perform the HASBRO INC. But the stock apears to be less risky and, when comparing its historical volatility, SBA Communications Corp is 1.24 times less risky than HASBRO INC. The stock trades about -0.02 of its potential returns per unit of risk. The HASBRO INC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,877 in HASBRO INC on September 14, 2024 and sell it today you would earn a total of 1,214 from holding HASBRO INC or generate 24.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
SBA Communications Corp vs. HASBRO INC
Performance |
| Timeline |
| SBA Communications Corp |
| HASBRO INC |
SBA Communications and HASBRO INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBA Communications and HASBRO INC
The main advantage of trading using opposite SBA Communications and HASBRO INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBA Communications position performs unexpectedly, HASBRO INC 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 HASBRO INC will offset losses from the drop in HASBRO INC's long position.| SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc |
| HASBRO INC vs. Monster Beverage Corp | HASBRO INC vs. Iridium Communications | HASBRO INC vs. SBA Communications Corp | HASBRO INC vs. Gamma Communications plc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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