Correlation Between Carters and JAKKS Pacific
Can any of the company-specific risk be diversified away by investing in both Carters and JAKKS Pacific 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 Carters and JAKKS Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carters and JAKKS Pacific, you can compare the effects of market volatilities on Carters and JAKKS Pacific 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 Carters with a short position of JAKKS Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carters and JAKKS Pacific.
Diversification Opportunities for Carters and JAKKS Pacific
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Carters and JAKKS is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Carters and JAKKS Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAKKS Pacific and Carters 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 Carters are associated (or correlated) with JAKKS Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAKKS Pacific has no effect on the direction of Carters i.e., Carters and JAKKS Pacific go up and down completely randomly.
Pair Corralation between Carters and JAKKS Pacific
Considering the 90-day investment horizon Carters is expected to under-perform the JAKKS Pacific. But the stock apears to be less risky and, when comparing its historical volatility, Carters is 1.12 times less risky than JAKKS Pacific. The stock trades about -0.1 of its potential returns per unit of risk. The JAKKS Pacific is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,385 in JAKKS Pacific on August 31, 2024 and sell it today you would earn a total of 415.00 from holding JAKKS Pacific or generate 17.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carters vs. JAKKS Pacific
Performance |
| Timeline |
| Carters |
| JAKKS Pacific |
Carters and JAKKS Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carters and JAKKS Pacific
The main advantage of trading using opposite Carters and JAKKS Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carters position performs unexpectedly, JAKKS Pacific 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 JAKKS Pacific will offset losses from the drop in JAKKS Pacific's long position.| Carters vs. Childrens Place | Carters vs. Gildan Activewear | Carters vs. Oxford Industries | Carters vs. Columbia Sportswear |
| JAKKS Pacific vs. Escalade Incorporated | JAKKS Pacific vs. Clarus Corp | JAKKS Pacific vs. Six Flags Entertainment | JAKKS Pacific vs. American Outdoor Brands |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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