Correlation Between Visa and JAKKS Pacific
Can any of the company-specific risk be diversified away by investing in both Visa and JAKKS Pacific 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 Visa and JAKKS Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and JAKKS Pacific, you can compare the effects of market volatilities on Visa and JAKKS Pacific 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 Visa with a short position of JAKKS Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and JAKKS Pacific.
Diversification Opportunities for Visa and JAKKS Pacific
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and JAKKS is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and JAKKS Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAKKS Pacific and Visa 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 Visa Class A are associated (or correlated) with JAKKS Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAKKS Pacific has no effect on the direction of Visa i.e., Visa and JAKKS Pacific go up and down completely randomly.
Pair Corralation between Visa and JAKKS Pacific
Taking into account the 90-day investment horizon Visa is expected to generate 1.83 times less return on investment than JAKKS Pacific. But when comparing it to its historical volatility, Visa Class A is 3.61 times less risky than JAKKS Pacific. It trades about 0.09 of its potential returns per unit of risk. JAKKS Pacific is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,756 in JAKKS Pacific on August 27, 2024 and sell it today you would earn a total of 1,023 from holding JAKKS Pacific or generate 58.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. JAKKS Pacific
Performance |
| Timeline |
| Visa Class A |
| JAKKS Pacific |
Visa and JAKKS Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and JAKKS Pacific
The main advantage of trading using opposite Visa and JAKKS Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, JAKKS Pacific 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 JAKKS Pacific will offset losses from the drop in JAKKS Pacific's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| JAKKS Pacific vs. Escalade Incorporated | JAKKS Pacific vs. Clarus Corp | JAKKS Pacific vs. Six Flags Entertainment | JAKKS Pacific vs. American Outdoor Brands |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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