Correlation Between Hasbro and Six Flags
Can any of the company-specific risk be diversified away by investing in both Hasbro and Six Flags 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 Six Flags into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hasbro Inc and Six Flags Entertainment, you can compare the effects of market volatilities on Hasbro and Six Flags 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 Six Flags. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hasbro and Six Flags.
Diversification Opportunities for Hasbro and Six Flags
Excellent diversification
The 3 months correlation between Hasbro and Six is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro Inc and Six Flags Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Flags Entertainment 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 Six Flags. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Flags Entertainment has no effect on the direction of Hasbro i.e., Hasbro and Six Flags go up and down completely randomly.
Pair Corralation between Hasbro and Six Flags
Considering the 90-day investment horizon Hasbro is expected to generate 2.35 times less return on investment than Six Flags. But when comparing it to its historical volatility, Hasbro Inc is 1.3 times less risky than Six Flags. It trades about 0.03 of its potential returns per unit of risk. Six Flags Entertainment is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,178 in Six Flags Entertainment on September 14, 2024 and sell it today you would earn a total of 1,022 from holding Six Flags Entertainment or generate 46.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 76.92% |
| Values | Daily Returns |
Hasbro Inc vs. Six Flags Entertainment
Performance |
| Timeline |
| Hasbro Inc |
| Six Flags Entertainment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hasbro and Six Flags Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hasbro and Six Flags
The main advantage of trading using opposite Hasbro and Six Flags positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hasbro position performs unexpectedly, Six Flags 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 Six Flags will offset losses from the drop in Six Flags' long position.| Hasbro vs. Clarus Corp | Hasbro vs. Johnson Outdoors | Hasbro vs. JAKKS Pacific | Hasbro vs. OneSpaWorld Holdings |
| Six Flags vs. JAKKS Pacific | Six Flags vs. OneSpaWorld Holdings | Six Flags vs. Clarus Corp | Six Flags 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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