Correlation Between Playmates Toys and DATA MODUL

Can any of the company-specific risk be diversified away by investing in both Playmates Toys and DATA MODUL 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 DATA MODUL 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 DATA MODUL , you can compare the effects of market volatilities on Playmates Toys and DATA MODUL 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 DATA MODUL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playmates Toys and DATA MODUL.

Diversification Opportunities for Playmates Toys and DATA MODUL

0.06

Correlation Coefficient

Playmates Toys  DATA MODUL

Significant diversification

The 3 months correlation between Playmates and DATA is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Playmates Toys Limited and DATA MODUL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATA MODUL 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 DATA MODUL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATA MODUL has no effect on the direction of Playmates Toys i.e., Playmates Toys and DATA MODUL go up and down completely randomly.

Pair Corralation between Playmates Toys and DATA MODUL

Assuming the 90 days horizon Playmates Toys Limited is expected to generate 5.32 times more return on investment than DATA MODUL. However, Playmates Toys is 5.32 times more volatile than DATA MODUL . It trades about 0.05 of its potential returns per unit of risk. DATA MODUL is currently generating about -0.01 per unit of risk. If you would invest  6.90  in Playmates Toys Limited on December 21, 2024 and sell it today you would lose (0.40) from holding Playmates Toys Limited or give up 5.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Playmates Toys Limited  vs.  DATA MODUL

Playmates Toys

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Playmates Toys Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Playmates Toys reported solid returns over the last few months and may actually be approaching a breakup point.

DATA MODUL

Risk-Adjusted Performance

Very Weak

Over the last 90 days DATA MODUL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, DATA MODUL is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Playmates Toys and DATA MODUL

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

The idea behind Playmates Toys Limited and DATA MODUL 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.