Correlation Between Hasbro and Life Clips

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

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

Diversification Opportunities for Hasbro and Life Clips

0.0

Correlation Coefficient

Hasbro  Life Clips

Pay attention - limited upside

The 3 months correlation between Hasbro and Life is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro Inc and Life Clips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Clips and Hasbro 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 Hasbro Inc are associated (or correlated) with Life Clips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Clips has no effect on the direction of Hasbro i.e., Hasbro and Life Clips go up and down completely randomly.

Pair Corralation between Hasbro and Life Clips

Considering the 90-day investment horizon Hasbro Inc is expected to generate 0.22 times more return on investment than Life Clips. However, Hasbro Inc is 4.57 times less risky than Life Clips. It trades about 0.03 of its potential returns per unit of risk. Life Clips is currently generating about -0.13 per unit of risk. If you would invest  5,502  in Hasbro Inc on September 3, 2024 and sell it today you would earn a total of  1,013  from holding Hasbro Inc or generate 18.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	30.71%
Values	Daily Returns

Hasbro Inc  vs.  Life Clips

Hasbro Inc

Risk-Adjusted Performance

0 of 100

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 comparatively stable basic indicators, Hasbro is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Life Clips

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Life Clips has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, Life Clips is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Hasbro and Life Clips

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

The idea behind Hasbro Inc and Life Clips 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.