Correlation Between Noble Plc and Hasbro

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

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

Diversification Opportunities for Noble Plc and Hasbro

0.37

Correlation Coefficient

Noble Plc  Hasbro

Weak diversification

The 3 months correlation between Noble and Hasbro is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Noble plc and Hasbro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hasbro Inc and Noble Plc 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 Noble plc 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 Noble Plc i.e., Noble Plc and Hasbro go up and down completely randomly.

Pair Corralation between Noble Plc and Hasbro

Allowing for the 90-day total investment horizon Noble plc is expected to generate 1.76 times more return on investment than Hasbro. However, Noble Plc is 1.76 times more volatile than Hasbro Inc. It trades about 0.0 of its potential returns per unit of risk. Hasbro Inc is currently generating about -0.04 per unit of risk. If you would invest  3,468  in Noble plc on September 4, 2024 and sell it today you would lose (78.00) from holding Noble plc or give up 2.25% of portfolio value over 90 days.

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

Noble plc  vs.  Hasbro Inc

Noble plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Noble plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Noble Plc is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Noble Plc and Hasbro

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

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.