Correlation Between PLAYMATES TOYS and GALP ENERGIA
Can any of the company-specific risk be diversified away by investing in both PLAYMATES TOYS and GALP ENERGIA 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 GALP ENERGIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYMATES TOYS and GALP ENERGIA B , you can compare the effects of market volatilities on PLAYMATES TOYS and GALP ENERGIA 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 GALP ENERGIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYMATES TOYS and GALP ENERGIA.
Diversification Opportunities for PLAYMATES TOYS and GALP ENERGIA
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PLAYMATES and GALP is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding PLAYMATES TOYS and GALP ENERGIA B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GALP ENERGIA B 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 GALP ENERGIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GALP ENERGIA B has no effect on the direction of PLAYMATES TOYS i.e., PLAYMATES TOYS and GALP ENERGIA go up and down completely randomly.
Pair Corralation between PLAYMATES TOYS and GALP ENERGIA
Assuming the 90 days trading horizon PLAYMATES TOYS is expected to generate 2.26 times more return on investment than GALP ENERGIA. However, PLAYMATES TOYS is 2.26 times more volatile than GALP ENERGIA B . It trades about 0.03 of its potential returns per unit of risk. GALP ENERGIA B is currently generating about -0.07 per unit of risk. If you would invest 6.40 in PLAYMATES TOYS on December 5, 2024 and sell it today you would earn a total of 0.20 from holding PLAYMATES TOYS or generate 3.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PLAYMATES TOYS vs. GALP ENERGIA B
Performance |
Timeline |
PLAYMATES TOYS |
GALP ENERGIA B |
PLAYMATES TOYS and GALP ENERGIA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PLAYMATES TOYS and GALP ENERGIA
The main advantage of trading using opposite PLAYMATES TOYS and GALP ENERGIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYMATES TOYS position performs unexpectedly, GALP ENERGIA 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 GALP ENERGIA will offset losses from the drop in GALP ENERGIA's long position.PLAYMATES TOYS vs. SIERRA METALS | PLAYMATES TOYS vs. CORNISH METALS INC | PLAYMATES TOYS vs. Aluminum of | PLAYMATES TOYS vs. ADRIATIC METALS LS 013355 |
GALP ENERGIA vs. Yanzhou Coal Mining | GALP ENERGIA vs. Harmony Gold Mining | GALP ENERGIA vs. JIAHUA STORES | GALP ENERGIA vs. MCEWEN MINING INC |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |