Correlation Between Hasbro and Stingray
Can any of the company-specific risk be diversified away by investing in both Hasbro and Stingray 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 Stingray into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hasbro Inc and Stingray Group, you can compare the effects of market volatilities on Hasbro and Stingray 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 Stingray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hasbro and Stingray.
Diversification Opportunities for Hasbro and Stingray
Poor diversification
The 3 months correlation between Hasbro and Stingray is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro Inc and Stingray Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stingray Group 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 Stingray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stingray Group has no effect on the direction of Hasbro i.e., Hasbro and Stingray go up and down completely randomly.
Pair Corralation between Hasbro and Stingray
Considering the 90-day investment horizon Hasbro is expected to generate 3.37 times less return on investment than Stingray. But when comparing it to its historical volatility, Hasbro Inc is 2.48 times less risky than Stingray. It trades about 0.21 of its potential returns per unit of risk. Stingray Group is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 507.00 in Stingray Group on November 18, 2024 and sell it today you would earn a total of 114.00 from holding Stingray Group or generate 22.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hasbro Inc vs. Stingray Group
Performance |
| Timeline |
| Hasbro Inc |
| Stingray Group |
Hasbro and Stingray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hasbro and Stingray
The main advantage of trading using opposite Hasbro and Stingray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hasbro position performs unexpectedly, Stingray 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 Stingray will offset losses from the drop in Stingray's long position.The idea behind Hasbro Inc and Stingray Group 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.| Stingray vs. Jeld Wen Holding | Stingray vs. Deluxe | Stingray vs. Everus Construction Group | Stingray vs. Udemy Inc |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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