Correlation Between Hasbro and SEAS Old
Can any of the company-specific risk be diversified away by investing in both Hasbro and SEAS Old 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 SEAS Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hasbro Inc and SEAS Old, you can compare the effects of market volatilities on Hasbro and SEAS Old 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 SEAS Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hasbro and SEAS Old.
Diversification Opportunities for Hasbro and SEAS Old
Good diversification
The 3 months correlation between Hasbro and SEAS is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro Inc and SEAS Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEAS Old 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 SEAS Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEAS Old has no effect on the direction of Hasbro i.e., Hasbro and SEAS Old go up and down completely randomly.
Pair Corralation between Hasbro and SEAS Old
Considering the 90-day investment horizon Hasbro Inc is expected to generate 0.93 times more return on investment than SEAS Old. However, Hasbro Inc is 1.08 times less risky than SEAS Old. It trades about 0.01 of its potential returns per unit of risk. SEAS Old is currently generating about -0.04 per unit of risk. If you would invest 5,896 in Hasbro Inc on October 14, 2024 and sell it today you would lose (192.00) from holding Hasbro Inc or give up 3.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 25.6% |
| Values | Daily Returns |
Hasbro Inc vs. SEAS Old
Performance |
| Timeline |
| Hasbro Inc |
| SEAS Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hasbro and SEAS Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hasbro and SEAS Old
The main advantage of trading using opposite Hasbro and SEAS Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hasbro position performs unexpectedly, SEAS Old 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 SEAS Old will offset losses from the drop in SEAS Old's long position.The idea behind Hasbro Inc and SEAS Old 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.| SEAS Old vs. JAKKS Pacific | SEAS Old vs. OneSpaWorld Holdings | SEAS Old vs. Clarus Corp | SEAS Old 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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