Correlation Between PLAYMATES TOYS and KYB PORATION

Can any of the company-specific risk be diversified away by investing in both PLAYMATES TOYS and KYB PORATION 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 KYB PORATION into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PLAYMATES TOYS and KYB PORATION, you can compare the effects of market volatilities on PLAYMATES TOYS and KYB PORATION 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 KYB PORATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYMATES TOYS and KYB PORATION.

Diversification Opportunities for PLAYMATES TOYS and KYB PORATION

-0.42

Correlation Coefficient

PLAYMATES TOYS  KYB PORATION

Very good diversification

The 3 months correlation between PLAYMATES and KYB is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding PLAYMATES TOYS and KYB PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KYB PORATION 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 are associated (or correlated) with KYB PORATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KYB PORATION has no effect on the direction of PLAYMATES TOYS i.e., PLAYMATES TOYS and KYB PORATION go up and down completely randomly.

Pair Corralation between PLAYMATES TOYS and KYB PORATION

Assuming the 90 days trading horizon PLAYMATES TOYS is expected to generate 3.31 times more return on investment than KYB PORATION. However, PLAYMATES TOYS is 3.31 times more volatile than KYB PORATION. It trades about 0.08 of its potential returns per unit of risk. KYB PORATION is currently generating about 0.06 per unit of risk. If you would invest  1.38  in PLAYMATES TOYS on October 5, 2024 and sell it today you would earn a total of  4.82  from holding PLAYMATES TOYS or generate 349.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

PLAYMATES TOYS  vs.  KYB PORATION

PLAYMATES TOYS

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days PLAYMATES TOYS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

KYB PORATION

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days KYB PORATION has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, KYB PORATION reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PLAYMATES TOYS and KYB PORATION

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

The idea behind PLAYMATES TOYS and KYB PORATION 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.