Correlation Between EZGO Technologies and Hasbro
Can any of the company-specific risk be diversified away by investing in both EZGO Technologies and Hasbro 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 EZGO Technologies and Hasbro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EZGO Technologies and Hasbro Inc, you can compare the effects of market volatilities on EZGO Technologies and Hasbro 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 EZGO Technologies with a short position of Hasbro. Check out your portfolio center. Please also check ongoing floating volatility patterns of EZGO Technologies and Hasbro.
Diversification Opportunities for EZGO Technologies and Hasbro
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EZGO and Hasbro is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding EZGO Technologies and Hasbro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hasbro Inc and EZGO Technologies 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 EZGO Technologies are associated (or correlated) with Hasbro. 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 EZGO Technologies i.e., EZGO Technologies and Hasbro go up and down completely randomly.
Pair Corralation between EZGO Technologies and Hasbro
Given the investment horizon of 90 days EZGO Technologies is expected to under-perform the Hasbro. In addition to that, EZGO Technologies is 2.69 times more volatile than Hasbro Inc. It trades about -0.27 of its total potential returns per unit of risk. Hasbro Inc is currently generating about 0.06 per unit of volatility. If you would invest 6,342 in Hasbro Inc on September 12, 2024 and sell it today you would earn a total of 96.00 from holding Hasbro Inc or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EZGO Technologies vs. Hasbro Inc
Performance |
| Timeline |
| EZGO Technologies |
| Hasbro Inc |
EZGO Technologies and Hasbro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EZGO Technologies and Hasbro
The main advantage of trading using opposite EZGO Technologies and Hasbro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EZGO Technologies position performs unexpectedly, Hasbro 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 will offset losses from the drop in Hasbro's long position.| EZGO Technologies vs. Vision Marine Technologies | EZGO Technologies vs. Marine Products | EZGO Technologies vs. Thor Industries | EZGO Technologies vs. BRP Inc |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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