Correlation Between PLAYMATES TOYS and MAVEN WIRELESS

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

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

Diversification Opportunities for PLAYMATES TOYS and MAVEN WIRELESS

0.45

Correlation Coefficient

PLAYMATES TOYS  MAVEN WIRELESS

Very weak diversification

The 3 months correlation between PLAYMATES and MAVEN is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding PLAYMATES TOYS and MAVEN WIRELESS SWEDEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAVEN WIRELESS SWEDEN 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 MAVEN WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAVEN WIRELESS SWEDEN has no effect on the direction of PLAYMATES TOYS i.e., PLAYMATES TOYS and MAVEN WIRELESS go up and down completely randomly.

Pair Corralation between PLAYMATES TOYS and MAVEN WIRELESS

Assuming the 90 days trading horizon PLAYMATES TOYS is expected to generate 1.22 times more return on investment than MAVEN WIRELESS. However, PLAYMATES TOYS is 1.22 times more volatile than MAVEN WIRELESS SWEDEN. It trades about 0.01 of its potential returns per unit of risk. MAVEN WIRELESS SWEDEN is currently generating about 0.0 per unit of risk. If you would invest  6.90  in PLAYMATES TOYS on December 22, 2024 and sell it today you would lose (0.30) from holding PLAYMATES TOYS or give up 4.35% of portfolio value over 90 days.

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

PLAYMATES TOYS  vs.  MAVEN WIRELESS SWEDEN

PLAYMATES TOYS

Risk-Adjusted Performance

Very 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 comparatively stable basic indicators, PLAYMATES TOYS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

MAVEN WIRELESS SWEDEN

Risk-Adjusted Performance

Very Weak

Over the last 90 days MAVEN WIRELESS SWEDEN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MAVEN WIRELESS 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 MAVEN WIRELESS

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

The idea behind PLAYMATES TOYS and MAVEN WIRELESS SWEDEN 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.