Correlation Between FG Group and JAKKS Pacific

Can any of the company-specific risk be diversified away by investing in both FG Group and JAKKS Pacific 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 FG Group and JAKKS Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FG Group Holdings and JAKKS Pacific, you can compare the effects of market volatilities on FG Group and JAKKS Pacific 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 FG Group with a short position of JAKKS Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of FG Group and JAKKS Pacific.

Diversification Opportunities for FG Group and JAKKS Pacific

-0.22

Correlation Coefficient

FG Group  JAKKS Pacific

Very good diversification

The 3 months correlation between FGH and JAKKS is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding FG Group Holdings and JAKKS Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAKKS Pacific and FG Group 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 FG Group Holdings are associated (or correlated) with JAKKS Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAKKS Pacific has no effect on the direction of FG Group i.e., FG Group and JAKKS Pacific go up and down completely randomly.

Pair Corralation between FG Group and JAKKS Pacific

If you would invest  0.00  in FG Group Holdings on October 10, 2024 and sell it today you would earn a total of  0.00  from holding FG Group Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	2.5%
Values	Daily Returns

FG Group Holdings  vs.  JAKKS Pacific

FG Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FG Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, FG Group is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

JAKKS Pacific

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JAKKS Pacific are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, JAKKS Pacific may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with FG Group and JAKKS Pacific

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

The idea behind FG Group Holdings and JAKKS Pacific 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.