Correlation Between Vinco Ventures and JAKKS Pacific

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

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

Diversification Opportunities for Vinco Ventures and JAKKS Pacific

-0.62

Correlation Coefficient

Vinco Ventures  JAKKS Pacific

Excellent diversification

The 3 months correlation between Vinco and JAKKS is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Vinco Ventures and JAKKS Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAKKS Pacific and Vinco Ventures 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 Vinco Ventures 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 Vinco Ventures i.e., Vinco Ventures and JAKKS Pacific go up and down completely randomly.

Pair Corralation between Vinco Ventures and JAKKS Pacific

If you would invest  512.00  in Vinco Ventures on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Vinco Ventures or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

Vinco Ventures  vs.  JAKKS Pacific

Vinco Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vinco Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Vinco Ventures is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

JAKKS Pacific

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JAKKS Pacific are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, JAKKS Pacific disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vinco Ventures and JAKKS Pacific

The main advantage of trading using opposite Vinco Ventures and JAKKS Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vinco Ventures 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 Vinco Ventures 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.