Correlation Between Hasbro and Oriental Land

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

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

Diversification Opportunities for Hasbro and Oriental Land

0.15

Correlation Coefficient

Hasbro  Oriental Land

Average diversification

The 3 months correlation between Hasbro and Oriental is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro Inc and Oriental Land Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Land 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 Oriental Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Land has no effect on the direction of Hasbro i.e., Hasbro and Oriental Land go up and down completely randomly.

Pair Corralation between Hasbro and Oriental Land

Considering the 90-day investment horizon Hasbro Inc is expected to generate 0.22 times more return on investment than Oriental Land. However, Hasbro Inc is 4.64 times less risky than Oriental Land. It trades about -0.02 of its potential returns per unit of risk. Oriental Land Co is currently generating about -0.02 per unit of risk. If you would invest  6,650  in Hasbro Inc on September 3, 2024 and sell it today you would lose (135.00) from holding Hasbro Inc or give up 2.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Hasbro Inc  vs.  Oriental Land Co

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.

Oriental Land

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oriental Land Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Hasbro and Oriental Land

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

The idea behind Hasbro Inc and Oriental Land Co 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.