Correlation Between Vista Outdoor and Hasbro
Can any of the company-specific risk be diversified away by investing in both Vista Outdoor 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 Vista Outdoor and Hasbro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vista Outdoor and Hasbro Inc, you can compare the effects of market volatilities on Vista Outdoor 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 Vista Outdoor with a short position of Hasbro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Outdoor and Hasbro.
Diversification Opportunities for Vista Outdoor and Hasbro
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vista and Hasbro is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Vista Outdoor and Hasbro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hasbro Inc and Vista Outdoor 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 Vista Outdoor 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 Vista Outdoor i.e., Vista Outdoor and Hasbro go up and down completely randomly.
Pair Corralation between Vista Outdoor and Hasbro
Given the investment horizon of 90 days Vista Outdoor is expected to generate 1.12 times more return on investment than Hasbro. However, Vista Outdoor is 1.12 times more volatile than Hasbro Inc. It trades about 0.05 of its potential returns per unit of risk. Hasbro Inc is currently generating about 0.02 per unit of risk. If you would invest 2,755 in Vista Outdoor on August 27, 2024 and sell it today you would earn a total of 1,687 from holding Vista Outdoor or generate 61.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vista Outdoor vs. Hasbro Inc
Performance |
| Timeline |
| Vista Outdoor |
| Hasbro Inc |
Vista Outdoor and Hasbro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vista Outdoor and Hasbro
The main advantage of trading using opposite Vista Outdoor and Hasbro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Outdoor 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.| Vista Outdoor vs. Clarus Corp | Vista Outdoor vs. Johnson Outdoors | Vista Outdoor vs. Escalade Incorporated | Vista Outdoor vs. JAKKS Pacific |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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