Correlation Between Hasbro and Jerash Holdings

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

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

Diversification Opportunities for Hasbro and Jerash Holdings

0.76

Correlation Coefficient

Hasbro  Jerash Holdings

Poor diversification

The 3 months correlation between Hasbro and Jerash is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro Inc and Jerash Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jerash Holdings and Hasbro 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 Hasbro Inc are associated (or correlated) with Jerash Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jerash Holdings has no effect on the direction of Hasbro i.e., Hasbro and Jerash Holdings go up and down completely randomly.

Pair Corralation between Hasbro and Jerash Holdings

Considering the 90-day investment horizon Hasbro Inc is expected to generate 1.39 times more return on investment than Jerash Holdings. However, Hasbro is 1.39 times more volatile than Jerash Holdings. It trades about 0.09 of its potential returns per unit of risk. Jerash Holdings is currently generating about 0.04 per unit of risk. If you would invest  5,511  in Hasbro Inc on December 28, 2024 and sell it today you would earn a total of  627.00  from holding Hasbro Inc or generate 11.38% return on investment over 90 days.

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

Hasbro Inc  vs.  Jerash Holdings

Hasbro Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hasbro Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hasbro unveiled solid returns over the last few months and may actually be approaching a breakup point.

Jerash Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jerash Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Jerash Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Hasbro and Jerash Holdings

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

The idea behind Hasbro Inc and Jerash Holdings 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.