Correlation Between Hasbro and Disney
Can any of the company-specific risk be diversified away by investing in both Hasbro and Disney 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 Disney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hasbro Inc and Walt Disney, you can compare the effects of market volatilities on Hasbro and Disney 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 Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hasbro and Disney.
Diversification Opportunities for Hasbro and Disney
Very good diversification
The 12 months correlation between Hasbro and Disney is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro Inc and Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney 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 Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of Hasbro i.e., Hasbro and Disney go up and down completely randomly.
Pair Corralation between Hasbro and Disney
Considering the 90-day investment horizon Hasbro is expected to generate 2.41 times less return on investment than Disney. In addition to that, Hasbro is 1.3 times more volatile than Walt Disney. It trades about 0.02 of its total potential returns per unit of risk. Walt Disney is currently generating about 0.06 per unit of volatility. If you would invest 9,169 in Walt Disney on February 6, 2024 and sell it today you would earn a total of 2,197 from holding Walt Disney or generate 23.96% return on investment over 90 days.
| Time Period | 12 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hasbro Inc vs. Walt Disney
Performance |
| Timeline |
| Hasbro Inc |
| Walt Disney |
Hasbro and Disney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hasbro and Disney
The main advantage of trading using opposite Hasbro and Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hasbro position performs unexpectedly, Disney 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 Disney will offset losses from the drop in Disney's long position.| Hasbro vs. Planet Fitness | Hasbro vs. Funko Inc | Hasbro vs. Cedar Fair LP | Hasbro vs. OneSpaWorld Holdings |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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