Correlation Between Primo Brands and HASBRO

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

By analyzing existing cross correlation between Primo Brands and HASBRO INC 635, you can compare the effects of market volatilities on Primo Brands 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 Primo Brands with a short position of HASBRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primo Brands and HASBRO.

Diversification Opportunities for Primo Brands and HASBRO

-0.61

Correlation Coefficient

Primo Brands  HASBRO

Excellent diversification

The 3 months correlation between Primo and HASBRO is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Primo Brands and HASBRO INC 635 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HASBRO INC 635 and Primo Brands 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 Primo Brands 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 635 has no effect on the direction of Primo Brands i.e., Primo Brands and HASBRO go up and down completely randomly.

Pair Corralation between Primo Brands and HASBRO

Given the investment horizon of 90 days Primo Brands is expected to generate 1.85 times more return on investment than HASBRO. However, Primo Brands is 1.85 times more volatile than HASBRO INC 635. It trades about 0.24 of its potential returns per unit of risk. HASBRO INC 635 is currently generating about -0.1 per unit of risk. If you would invest  2,344  in Primo Brands on September 14, 2024 and sell it today you would earn a total of  830.00  from holding Primo Brands or generate 35.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	80.95%
Values	Daily Returns

Primo Brands  vs.  HASBRO INC 635

Primo Brands

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Primo Brands are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent primary indicators, Primo Brands sustained solid returns over the last few months and may actually be approaching a breakup point.

HASBRO INC 635

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HASBRO INC 635 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HASBRO INC 635 investors.

Pair Trading with Primo Brands and HASBRO

The main advantage of trading using opposite Primo Brands and HASBRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primo Brands 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 Primo Brands and HASBRO INC 635 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.