Correlation Between Li Bang and Hasbro

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

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

Diversification Opportunities for Li Bang and Hasbro

-0.16

Correlation Coefficient

Li Bang  Hasbro

Good diversification

The 3 months correlation between LBGJ and Hasbro is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Li Bang International and Hasbro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hasbro Inc and Li Bang 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 Li Bang International 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 Li Bang i.e., Li Bang and Hasbro go up and down completely randomly.

Pair Corralation between Li Bang and Hasbro

Given the investment horizon of 90 days Li Bang International is expected to under-perform the Hasbro. In addition to that, Li Bang is 5.01 times more volatile than Hasbro Inc. It trades about -0.03 of its total potential returns per unit of risk. Hasbro Inc is currently generating about -0.05 per unit of volatility. If you would invest  6,726  in Hasbro Inc on December 4, 2024 and sell it today you would lose (543.00) from holding Hasbro Inc or give up 8.07% of portfolio value over 90 days.

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

Li Bang International  vs.  Hasbro Inc

Li Bang International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Li Bang International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's technical and fundamental indicators remain relatively steady which may send shares a bit higher in April 2025. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Hasbro Inc

Risk-Adjusted Performance

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Li Bang and Hasbro

The main advantage of trading using opposite Li Bang and Hasbro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Li Bang 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 Li Bang International 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.