Correlation Between Hasbro and Malibu Boats
Can any of the company-specific risk be diversified away by investing in both Hasbro and Malibu Boats 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 Hasbro and Malibu Boats into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hasbro Inc and Malibu Boats, you can compare the effects of market volatilities on Hasbro and Malibu Boats 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 Hasbro with a short position of Malibu Boats. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hasbro and Malibu Boats.
Diversification Opportunities for Hasbro and Malibu Boats
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hasbro and Malibu is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro Inc and Malibu Boats in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malibu Boats and Hasbro 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 Hasbro Inc are associated (or correlated) with Malibu Boats. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malibu Boats has no effect on the direction of Hasbro i.e., Hasbro and Malibu Boats go up and down completely randomly.
Pair Corralation between Hasbro and Malibu Boats
Considering the 90-day investment horizon Hasbro Inc is expected to under-perform the Malibu Boats. But the stock apears to be less risky and, when comparing its historical volatility, Hasbro Inc is 1.7 times less risky than Malibu Boats. The stock trades about -0.03 of its potential returns per unit of risk. The Malibu Boats is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 4,102 in Malibu Boats on September 18, 2024 and sell it today you would lose (59.00) from holding Malibu Boats or give up 1.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hasbro Inc vs. Malibu Boats
Performance |
| Timeline |
| Hasbro Inc |
| Malibu Boats |
Hasbro and Malibu Boats Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hasbro and Malibu Boats
The main advantage of trading using opposite Hasbro and Malibu Boats positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hasbro position performs unexpectedly, Malibu Boats 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 Malibu Boats will offset losses from the drop in Malibu Boats' long position.| Hasbro vs. Clarus Corp | Hasbro vs. OneSpaWorld Holdings | Hasbro vs. Leatt Corp | Hasbro vs. Six Flags Entertainment |
| Malibu Boats vs. Polaris Industries | Malibu Boats vs. MCBC Holdings | Malibu Boats vs. LCI Industries | Malibu Boats vs. Thor Industries |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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