Correlation Between Shimano and Plby
Can any of the company-specific risk be diversified away by investing in both Shimano and Plby 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 Plby 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 Plby Group, you can compare the effects of market volatilities on Shimano and Plby 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 Plby. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shimano and Plby.
Diversification Opportunities for Shimano and Plby
Pay attention - limited upside
The 3 months correlation between Shimano and Plby is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Shimano Inc ADR and Plby Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plby Group 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 Plby. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plby Group has no effect on the direction of Shimano i.e., Shimano and Plby go up and down completely randomly.
Pair Corralation between Shimano and Plby
Assuming the 90 days horizon Shimano Inc ADR is expected to under-perform the Plby. But the pink sheet apears to be less risky and, when comparing its historical volatility, Shimano Inc ADR is 6.2 times less risky than Plby. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Plby Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 83.00 in Plby Group on August 31, 2024 and sell it today you would earn a total of 46.00 from holding Plby Group or generate 55.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shimano Inc ADR vs. Plby Group
Performance |
| Timeline |
| Shimano Inc ADR |
| Plby Group |
Shimano and Plby Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shimano and Plby
The main advantage of trading using opposite Shimano and Plby positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shimano position performs unexpectedly, Plby 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 Plby will offset losses from the drop in Plby's long position.| Shimano vs. Callaway Golf | Shimano vs. Peloton Interactive | Shimano vs. BANDAI NAMCO Holdings | Shimano vs. Nikon Corp |
| Plby vs. Purecycle Technologies Holdings | Plby vs. Dolphin Entertainment | Plby vs. Hall of Fame | Plby vs. Funko 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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