Correlation Between Johnson Outdoors and Hasbro
Can any of the company-specific risk be diversified away by investing in both Johnson Outdoors and Hasbro 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 Johnson Outdoors and Hasbro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Outdoors and Hasbro Inc, you can compare the effects of market volatilities on Johnson Outdoors and Hasbro 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 Johnson Outdoors with a short position of Hasbro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Outdoors and Hasbro.
Diversification Opportunities for Johnson Outdoors and Hasbro
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Johnson and Hasbro is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Outdoors and Hasbro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hasbro Inc and Johnson Outdoors 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 Johnson Outdoors are associated (or correlated) with Hasbro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hasbro Inc has no effect on the direction of Johnson Outdoors i.e., Johnson Outdoors and Hasbro go up and down completely randomly.
Pair Corralation between Johnson Outdoors and Hasbro
Given the investment horizon of 90 days Johnson Outdoors is expected to under-perform the Hasbro. In addition to that, Johnson Outdoors is 1.26 times more volatile than Hasbro Inc. It trades about -0.07 of its total potential returns per unit of risk. Hasbro Inc is currently generating about 0.08 per unit of volatility. If you would invest 4,648 in Hasbro Inc on September 2, 2024 and sell it today you would earn a total of 1,867 from holding Hasbro Inc or generate 40.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johnson Outdoors vs. Hasbro Inc
Performance |
| Timeline |
| Johnson Outdoors |
| Hasbro Inc |
Johnson Outdoors and Hasbro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Outdoors and Hasbro
The main advantage of trading using opposite Johnson Outdoors and Hasbro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Outdoors position performs unexpectedly, Hasbro 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 Hasbro will offset losses from the drop in Hasbro's long position.| Johnson Outdoors vs. LCI Industries | Johnson Outdoors vs. MCBC Holdings | Johnson Outdoors vs. Winnebago Industries | Johnson Outdoors 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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