Correlation Between Johnson Outdoors and Hasbro

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

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

Diversification Opportunities for Johnson Outdoors and Hasbro

0.48

Correlation Coefficient

Johnson Outdoors  Hasbro

Very weak diversification

The 3 months correlation between Johnson and Hasbro is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Outdoors and Hasbro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hasbro Inc and Johnson Outdoors 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 Johnson Outdoors are associated (or correlated) with Hasbro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hasbro Inc has no effect on the direction of Johnson Outdoors i.e., Johnson Outdoors and Hasbro go up and down completely randomly.

Pair Corralation between Johnson Outdoors and Hasbro

Given the investment horizon of 90 days Johnson Outdoors is expected to under-perform the Hasbro. In addition to that, Johnson Outdoors is 1.19 times more volatile than Hasbro Inc. It trades about -0.05 of its total potential returns per unit of risk. Hasbro Inc is currently generating about 0.07 per unit of volatility. If you would invest  4,959  in Hasbro Inc on September 13, 2024 and sell it today you would earn a total of  1,577  from holding Hasbro Inc or generate 31.8% return on investment over 90 days.

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

Johnson Outdoors  vs.  Hasbro Inc

Johnson Outdoors

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

Pair Trading with Johnson Outdoors and Hasbro

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

The idea behind Johnson Outdoors and Hasbro Inc 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.