Correlation Between SUN ART and PLAYMATES TOYS

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

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

Diversification Opportunities for SUN ART and PLAYMATES TOYS

0.12

Correlation Coefficient

SUN ART  PLAYMATES TOYS

Average diversification

The 3 months correlation between SUN and PLAYMATES is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding SUN ART RETAIL and PLAYMATES TOYS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYMATES TOYS and SUN ART 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 SUN ART RETAIL are associated (or correlated) with PLAYMATES TOYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYMATES TOYS has no effect on the direction of SUN ART i.e., SUN ART and PLAYMATES TOYS go up and down completely randomly.

Pair Corralation between SUN ART and PLAYMATES TOYS

Assuming the 90 days trading horizon SUN ART RETAIL is expected to under-perform the PLAYMATES TOYS. In addition to that, SUN ART is 1.09 times more volatile than PLAYMATES TOYS. It trades about -0.08 of its total potential returns per unit of risk. PLAYMATES TOYS is currently generating about 0.01 per unit of volatility. If you would invest  6.90  in PLAYMATES TOYS on December 21, 2024 and sell it today you would lose (0.30) from holding PLAYMATES TOYS or give up 4.35% of portfolio value over 90 days.

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

SUN ART RETAIL  vs.  PLAYMATES TOYS

SUN ART RETAIL

Risk-Adjusted Performance

Very Weak

Over the last 90 days SUN ART RETAIL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

PLAYMATES TOYS

Risk-Adjusted Performance

Very Weak

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

Pair Trading with SUN ART and PLAYMATES TOYS

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

The idea behind SUN ART RETAIL and PLAYMATES TOYS 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.