Correlation Between Franchise and Hasbro
Can any of the company-specific risk be diversified away by investing in both Franchise 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 Franchise and Hasbro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franchise Group and Hasbro Inc, you can compare the effects of market volatilities on Franchise 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 Franchise with a short position of Hasbro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franchise and Hasbro.
Diversification Opportunities for Franchise and Hasbro
Very good diversification
The 3 months correlation between Franchise and Hasbro is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Franchise Group and Hasbro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hasbro Inc and Franchise 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 Franchise Group 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 Franchise i.e., Franchise and Hasbro go up and down completely randomly.
Pair Corralation between Franchise and Hasbro
If you would invest 5,941 in Hasbro Inc on September 12, 2024 and sell it today you would earn a total of 595.00 from holding Hasbro Inc or generate 10.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.3% |
| Values | Daily Returns |
Franchise Group vs. Hasbro Inc
Performance |
| Timeline |
| Franchise Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hasbro Inc |
Franchise and Hasbro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franchise and Hasbro
The main advantage of trading using opposite Franchise and Hasbro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franchise 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.| Franchise vs. Hasbro Inc | Franchise vs. BW Offshore Limited | Franchise vs. Commonwealth Bank of | Franchise vs. Glacier Bancorp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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