Correlation Between Hasbro and On Holding

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

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

Diversification Opportunities for Hasbro and On Holding

-0.65

Correlation Coefficient

Hasbro  On Holding

Excellent diversification

The 3 months correlation between Hasbro and ONON is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro Inc and On Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on On Holding 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 On Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of On Holding has no effect on the direction of Hasbro i.e., Hasbro and On Holding go up and down completely randomly.

Pair Corralation between Hasbro and On Holding

Considering the 90-day investment horizon Hasbro Inc is expected to generate 0.75 times more return on investment than On Holding. However, Hasbro Inc is 1.33 times less risky than On Holding. It trades about 0.08 of its potential returns per unit of risk. On Holding is currently generating about -0.07 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  540.00  from holding Hasbro Inc or generate 9.63% return on investment over 90 days.

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

Hasbro Inc  vs.  On Holding

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.

On Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days On Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Hasbro and On Holding

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

The idea behind Hasbro Inc and On Holding 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.