Correlation Between Hasbro and OneSpaWorld Holdings
Can any of the company-specific risk be diversified away by investing in both Hasbro and OneSpaWorld Holdings 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 OneSpaWorld Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hasbro Inc and OneSpaWorld Holdings, you can compare the effects of market volatilities on Hasbro and OneSpaWorld Holdings 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 OneSpaWorld Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hasbro and OneSpaWorld Holdings.
Diversification Opportunities for Hasbro and OneSpaWorld Holdings
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hasbro and OneSpaWorld is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro Inc and OneSpaWorld Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSpaWorld Holdings 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 OneSpaWorld Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSpaWorld Holdings has no effect on the direction of Hasbro i.e., Hasbro and OneSpaWorld Holdings go up and down completely randomly.
Pair Corralation between Hasbro and OneSpaWorld Holdings
Considering the 90-day investment horizon Hasbro is expected to generate 2.25 times less return on investment than OneSpaWorld Holdings. But when comparing it to its historical volatility, Hasbro Inc is 1.12 times less risky than OneSpaWorld Holdings. It trades about 0.05 of its potential returns per unit of risk. OneSpaWorld Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,371 in OneSpaWorld Holdings on November 3, 2024 and sell it today you would earn a total of 765.00 from holding OneSpaWorld Holdings or generate 55.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hasbro Inc vs. OneSpaWorld Holdings
Performance |
| Timeline |
| Hasbro Inc |
| OneSpaWorld Holdings |
Hasbro and OneSpaWorld Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hasbro and OneSpaWorld Holdings
The main advantage of trading using opposite Hasbro and OneSpaWorld Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hasbro position performs unexpectedly, OneSpaWorld Holdings 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 OneSpaWorld Holdings will offset losses from the drop in OneSpaWorld Holdings' long position.The idea behind Hasbro Inc and OneSpaWorld Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| OneSpaWorld Holdings vs. Escalade Incorporated | OneSpaWorld Holdings vs. Johnson Outdoors | OneSpaWorld Holdings vs. Clarus Corp | OneSpaWorld Holdings vs. Six Flags Entertainment |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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