Correlation Between Hasbro and BANDAI NAMCO

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

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

Diversification Opportunities for Hasbro and BANDAI NAMCO

0.71

Correlation Coefficient

Hasbro  BANDAI NAMCO

Poor diversification

The 3 months correlation between Hasbro and BANDAI is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro Inc and BANDAI NAMCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANDAI NAMCO 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 BANDAI NAMCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANDAI NAMCO Holdings has no effect on the direction of Hasbro i.e., Hasbro and BANDAI NAMCO go up and down completely randomly.

Pair Corralation between Hasbro and BANDAI NAMCO

Considering the 90-day investment horizon Hasbro Inc is expected to under-perform the BANDAI NAMCO. But the stock apears to be less risky and, when comparing its historical volatility, Hasbro Inc is 1.36 times less risky than BANDAI NAMCO. The stock trades about -0.04 of its potential returns per unit of risk. The BANDAI NAMCO Holdings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,140  in BANDAI NAMCO Holdings on September 13, 2024 and sell it today you would lose (20.00) from holding BANDAI NAMCO Holdings or give up 0.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.65%
Values	Daily Returns

Hasbro Inc  vs.  BANDAI NAMCO Holdings

Hasbro Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hasbro Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Hasbro is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

BANDAI NAMCO Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANDAI NAMCO Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, BANDAI NAMCO is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Hasbro and BANDAI NAMCO

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

The idea behind Hasbro Inc and BANDAI NAMCO 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.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.