Correlation Between Sportsquest and Hasbro

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

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

Diversification Opportunities for Sportsquest and Hasbro

0.34

Correlation Coefficient

Sportsquest  Hasbro

Weak diversification

The 3 months correlation between Sportsquest and Hasbro is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sportsquest and Hasbro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hasbro Inc and Sportsquest 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 Sportsquest 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 Sportsquest i.e., Sportsquest and Hasbro go up and down completely randomly.

Pair Corralation between Sportsquest and Hasbro

Given the investment horizon of 90 days Sportsquest is expected to generate 14.51 times more return on investment than Hasbro. However, Sportsquest is 14.51 times more volatile than Hasbro Inc. It trades about 0.1 of its potential returns per unit of risk. Hasbro Inc is currently generating about -0.02 per unit of risk. If you would invest  0.02  in Sportsquest on September 4, 2024 and sell it today you would earn a total of  0.00  from holding Sportsquest or generate 0.0% return on investment over 90 days.

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

Sportsquest  vs.  Hasbro Inc

Sportsquest

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sportsquest are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Sportsquest unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 Sportsquest and Hasbro

The main advantage of trading using opposite Sportsquest and Hasbro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sportsquest 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 Sportsquest 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.