Correlation Between Shimano and Hasbro
Can any of the company-specific risk be diversified away by investing in both Shimano 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 Shimano and Hasbro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shimano Inc ADR and Hasbro Inc, you can compare the effects of market volatilities on Shimano 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 Shimano with a short position of Hasbro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shimano and Hasbro.
Diversification Opportunities for Shimano and Hasbro
Very weak diversification
The 3 months correlation between Shimano and Hasbro is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Shimano Inc ADR and Hasbro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hasbro Inc and Shimano 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 Shimano Inc ADR 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 Shimano i.e., Shimano and Hasbro go up and down completely randomly.
Pair Corralation between Shimano and Hasbro
Assuming the 90 days horizon Shimano Inc ADR is expected to under-perform the Hasbro. In addition to that, Shimano is 1.04 times more volatile than Hasbro Inc. It trades about -0.1 of its total potential returns per unit of risk. Hasbro Inc is currently generating about 0.02 per unit of volatility. If you would invest 6,040 in Hasbro Inc on August 24, 2024 and sell it today you would earn a total of 151.00 from holding Hasbro Inc or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shimano Inc ADR vs. Hasbro Inc
Performance |
| Timeline |
| Shimano Inc ADR |
| Hasbro Inc |
Shimano and Hasbro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shimano and Hasbro
The main advantage of trading using opposite Shimano and Hasbro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shimano 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.| Shimano vs. Small Cap Core | Shimano vs. Freedom Holding Corp | Shimano vs. Gfl Environmental Holdings | Shimano vs. Growth Fund Of |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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