Correlation Between FUTURE GAMING and PLAYMATES TOYS
Can any of the company-specific risk be diversified away by investing in both FUTURE GAMING and PLAYMATES TOYS 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 FUTURE GAMING and PLAYMATES TOYS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUTURE GAMING GRP and PLAYMATES TOYS, you can compare the effects of market volatilities on FUTURE GAMING and PLAYMATES TOYS 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 FUTURE GAMING with a short position of PLAYMATES TOYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUTURE GAMING and PLAYMATES TOYS.
Diversification Opportunities for FUTURE GAMING and PLAYMATES TOYS
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FUTURE and PLAYMATES is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding FUTURE GAMING GRP and PLAYMATES TOYS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYMATES TOYS and FUTURE GAMING 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 FUTURE GAMING GRP are associated (or correlated) with PLAYMATES TOYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYMATES TOYS has no effect on the direction of FUTURE GAMING i.e., FUTURE GAMING and PLAYMATES TOYS go up and down completely randomly.
Pair Corralation between FUTURE GAMING and PLAYMATES TOYS
Assuming the 90 days trading horizon FUTURE GAMING GRP is expected to under-perform the PLAYMATES TOYS. In addition to that, FUTURE GAMING is 1.71 times more volatile than PLAYMATES TOYS. It trades about -0.08 of its total potential returns per unit of risk. PLAYMATES TOYS is currently generating about -0.06 per unit of volatility. If you would invest 6.90 in PLAYMATES TOYS on September 14, 2024 and sell it today you would lose (0.30) from holding PLAYMATES TOYS or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUTURE GAMING GRP vs. PLAYMATES TOYS
Performance |
| Timeline |
| FUTURE GAMING GRP |
| PLAYMATES TOYS |
FUTURE GAMING and PLAYMATES TOYS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUTURE GAMING and PLAYMATES TOYS
The main advantage of trading using opposite FUTURE GAMING and PLAYMATES TOYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUTURE GAMING position performs unexpectedly, PLAYMATES TOYS 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 PLAYMATES TOYS will offset losses from the drop in PLAYMATES TOYS's long position.| FUTURE GAMING vs. Scientific Games | FUTURE GAMING vs. International Game Technology | FUTURE GAMING vs. Superior Plus Corp | FUTURE GAMING vs. SIVERS SEMICONDUCTORS AB |
| PLAYMATES TOYS vs. GALENA MINING LTD | PLAYMATES TOYS vs. LION ONE METALS | PLAYMATES TOYS vs. ASSOC BR FOODS | PLAYMATES TOYS vs. TYSON FOODS A |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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