Correlation Between Shimano and Hasbro

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

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

Diversification Opportunities for Shimano and Hasbro

0.34

Correlation Coefficient

Shimano  Hasbro

Weak diversification

The 3 months correlation between Shimano and Hasbro is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Shimano and Hasbro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hasbro Inc and Shimano 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 Shimano 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 Shimano i.e., Shimano and Hasbro go up and down completely randomly.

Pair Corralation between Shimano and Hasbro

Assuming the 90 days horizon Shimano is expected to generate 1.06 times more return on investment than Hasbro. However, Shimano is 1.06 times more volatile than Hasbro Inc. It trades about 0.09 of its potential returns per unit of risk. Hasbro Inc is currently generating about 0.09 per unit of risk. If you would invest  12,875  in Shimano on December 28, 2024 and sell it today you would earn a total of  1,436  from holding Shimano or generate 11.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.33%
Values	Daily Returns

Shimano  vs.  Hasbro Inc

Shimano

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shimano are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Shimano reported solid returns over the last few months and may actually be approaching a breakup point.

Hasbro Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hasbro Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hasbro unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shimano and Hasbro

The main advantage of trading using opposite Shimano and Hasbro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shimano 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 Shimano 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.