Correlation Between Hasbro and Nikon Corp

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

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

Diversification Opportunities for Hasbro and Nikon Corp

-0.13

Correlation Coefficient

Hasbro  Nikon Corp

Good diversification

The 3 months correlation between Hasbro and Nikon is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro Inc and Nikon Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nikon Corp 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 Nikon Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nikon Corp has no effect on the direction of Hasbro i.e., Hasbro and Nikon Corp go up and down completely randomly.

Pair Corralation between Hasbro and Nikon Corp

Considering the 90-day investment horizon Hasbro Inc is expected to generate 0.72 times more return on investment than Nikon Corp. However, Hasbro Inc is 1.39 times less risky than Nikon Corp. It trades about 0.08 of its potential returns per unit of risk. Nikon Corp is currently generating about 0.02 per unit of risk. If you would invest  5,609  in Hasbro Inc on December 27, 2024 and sell it today you would earn a total of  527.00  from holding Hasbro Inc or generate 9.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Hasbro Inc  vs.  Nikon Corp

Hasbro Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hasbro Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hasbro may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Nikon Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nikon Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Nikon Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hasbro and Nikon Corp

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

The idea behind Hasbro Inc and Nikon Corp 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.