Correlation Between OneSpaWorld Holdings and JAKKS Pacific

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

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

Diversification Opportunities for OneSpaWorld Holdings and JAKKS Pacific

0.9

Correlation Coefficient

OneSpaWorld Holdings  JAKKS Pacific

Almost no diversification

The 3 months correlation between OneSpaWorld and JAKKS is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding OneSpaWorld Holdings and JAKKS Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAKKS Pacific and OneSpaWorld Holdings 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 OneSpaWorld Holdings are associated (or correlated) with JAKKS Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAKKS Pacific has no effect on the direction of OneSpaWorld Holdings i.e., OneSpaWorld Holdings and JAKKS Pacific go up and down completely randomly.

Pair Corralation between OneSpaWorld Holdings and JAKKS Pacific

Considering the 90-day investment horizon OneSpaWorld Holdings is expected to under-perform the JAKKS Pacific. But the stock apears to be less risky and, when comparing its historical volatility, OneSpaWorld Holdings is 1.09 times less risky than JAKKS Pacific. The stock trades about -0.1 of its potential returns per unit of risk. The JAKKS Pacific is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  2,690  in JAKKS Pacific on December 30, 2024 and sell it today you would lose (234.00) from holding JAKKS Pacific or give up 8.7% of portfolio value over 90 days.

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

OneSpaWorld Holdings  vs.  JAKKS Pacific

OneSpaWorld Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days OneSpaWorld Holdings 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 fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

JAKKS Pacific

Risk-Adjusted Performance

Very Weak

Over the last 90 days JAKKS Pacific has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with OneSpaWorld Holdings and JAKKS Pacific

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

The idea behind OneSpaWorld Holdings and JAKKS Pacific 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.