Correlation Between Toys R and Group 6
Can any of the company-specific risk be diversified away by investing in both Toys R and Group 6 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 Toys R and Group 6 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Toys R Us and Group 6 Metals, you can compare the effects of market volatilities on Toys R and Group 6 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 Toys R with a short position of Group 6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toys R and Group 6.
Diversification Opportunities for Toys R and Group 6
Pay attention - limited upside
The 3 months correlation between Toys and Group is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Toys R Us and Group 6 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group 6 Metals and Toys R 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 Toys R Us are associated (or correlated) with Group 6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group 6 Metals has no effect on the direction of Toys R i.e., Toys R and Group 6 go up and down completely randomly.
Pair Corralation between Toys R and Group 6
If you would invest 2.50 in Group 6 Metals on December 1, 2024 and sell it today you would earn a total of 0.00 from holding Group 6 Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Toys R Us vs. Group 6 Metals
Performance |
| Timeline |
| Toys R Us |
| Group 6 Metals |
Toys R and Group 6 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Toys R and Group 6
The main advantage of trading using opposite Toys R and Group 6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toys R position performs unexpectedly, Group 6 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 Group 6 will offset losses from the drop in Group 6's long position.| Toys R vs. Australian United Investment | Toys R vs. K2 Asset Management | Toys R vs. Flagship Investments | Toys R vs. Pinnacle Investment Management |
| Group 6 vs. 29Metals | Group 6 vs. Sequoia Financial Group | Group 6 vs. Perseus Mining | Group 6 vs. Liberty Financial Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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