Correlation Between PULSION Medical and PLAYMATES TOYS
Can any of the company-specific risk be diversified away by investing in both PULSION Medical and PLAYMATES TOYS 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 PULSION Medical and PLAYMATES TOYS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PULSION Medical Systems and PLAYMATES TOYS, you can compare the effects of market volatilities on PULSION Medical and PLAYMATES TOYS 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 PULSION Medical with a short position of PLAYMATES TOYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PULSION Medical and PLAYMATES TOYS.
Diversification Opportunities for PULSION Medical and PLAYMATES TOYS
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PULSION and PLAYMATES is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding PULSION Medical Systems and PLAYMATES TOYS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYMATES TOYS and PULSION Medical 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 PULSION Medical Systems are associated (or correlated) with PLAYMATES TOYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYMATES TOYS has no effect on the direction of PULSION Medical i.e., PULSION Medical and PLAYMATES TOYS go up and down completely randomly.
Pair Corralation between PULSION Medical and PLAYMATES TOYS
Assuming the 90 days trading horizon PULSION Medical is expected to generate 11.58 times less return on investment than PLAYMATES TOYS. But when comparing it to its historical volatility, PULSION Medical Systems is 21.07 times less risky than PLAYMATES TOYS. It trades about 0.21 of its potential returns per unit of risk. PLAYMATES TOYS is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6.20 in PLAYMATES TOYS on November 3, 2024 and sell it today you would earn a total of 0.70 from holding PLAYMATES TOYS or generate 11.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
PULSION Medical Systems vs. PLAYMATES TOYS
Performance |
| Timeline |
| PULSION Medical Systems |
| PLAYMATES TOYS |
PULSION Medical and PLAYMATES TOYS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PULSION Medical and PLAYMATES TOYS
The main advantage of trading using opposite PULSION Medical and PLAYMATES TOYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PULSION Medical position performs unexpectedly, PLAYMATES TOYS 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 PLAYMATES TOYS will offset losses from the drop in PLAYMATES TOYS's long position.| PULSION Medical vs. Warner Music Group | PULSION Medical vs. PLAYWAY SA ZY 10 | PULSION Medical vs. De Grey Mining | PULSION Medical vs. DISTRICT METALS |
| PLAYMATES TOYS vs. Choice Hotels International | PLAYMATES TOYS vs. alstria office REIT AG | PLAYMATES TOYS vs. CDL INVESTMENT | PLAYMATES TOYS vs. Wyndham Hotels Resorts |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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