Correlation Between Playmates Toys and CIA ENGER

Can any of the company-specific risk be diversified away by investing in both Playmates Toys and CIA ENGER 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 Playmates Toys and CIA ENGER into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Playmates Toys Limited and CIA ENGER ADR, you can compare the effects of market volatilities on Playmates Toys and CIA ENGER 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 Playmates Toys with a short position of CIA ENGER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playmates Toys and CIA ENGER.

Diversification Opportunities for Playmates Toys and CIA ENGER

0.02

Correlation Coefficient

Playmates Toys  CIA ENGER

Significant diversification

The 3 months correlation between Playmates and CIA is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Playmates Toys Limited and CIA ENGER ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIA ENGER ADR and Playmates Toys 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 Playmates Toys Limited are associated (or correlated) with CIA ENGER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIA ENGER ADR has no effect on the direction of Playmates Toys i.e., Playmates Toys and CIA ENGER go up and down completely randomly.

Pair Corralation between Playmates Toys and CIA ENGER

If you would invest  1.28  in Playmates Toys Limited on October 26, 2024 and sell it today you would earn a total of  5.22  from holding Playmates Toys Limited or generate 407.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Playmates Toys Limited  vs.  CIA ENGER ADR

Playmates Toys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Playmates Toys Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Playmates Toys is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CIA ENGER ADR

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days CIA ENGER ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, CIA ENGER is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Playmates Toys and CIA ENGER

The main advantage of trading using opposite Playmates Toys and CIA ENGER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playmates Toys position performs unexpectedly, CIA ENGER 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 CIA ENGER will offset losses from the drop in CIA ENGER's long position.

The idea behind Playmates Toys Limited and CIA ENGER ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.