Correlation Between PLAYMATES TOYS and CONTAGIOUS GAMING

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

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

Diversification Opportunities for PLAYMATES TOYS and CONTAGIOUS GAMING

0.0

Correlation Coefficient

PLAYMATES TOYS  CONTAGIOUS GAMING

Pay attention - limited upside

The 3 months correlation between PLAYMATES and CONTAGIOUS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PLAYMATES TOYS and CONTAGIOUS GAMING INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONTAGIOUS GAMING INC 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 CONTAGIOUS GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONTAGIOUS GAMING INC has no effect on the direction of PLAYMATES TOYS i.e., PLAYMATES TOYS and CONTAGIOUS GAMING go up and down completely randomly.

Pair Corralation between PLAYMATES TOYS and CONTAGIOUS GAMING

If you would invest  7.15  in PLAYMATES TOYS on December 24, 2024 and sell it today you would lose (0.35) from holding PLAYMATES TOYS or give up 4.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

PLAYMATES TOYS  vs.  CONTAGIOUS GAMING INC

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.

CONTAGIOUS GAMING INC

Risk-Adjusted Performance

Very Weak

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

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

The idea behind PLAYMATES TOYS and CONTAGIOUS GAMING INC 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .