Correlation Between International Game and Hasbro

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Can any of the company-specific risk be diversified away by investing in both International Game 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 International Game and Hasbro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Game Technology and Hasbro Inc, you can compare the effects of market volatilities on International Game 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 International Game with a short position of Hasbro. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and Hasbro.

Diversification Opportunities for International Game and Hasbro

-0.69
  Correlation Coefficient

Excellent diversification

The 3 months correlation between International and Hasbro is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and Hasbro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hasbro Inc and International Game 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 International Game Technology 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 International Game i.e., International Game and Hasbro go up and down completely randomly.

Pair Corralation between International Game and Hasbro

Considering the 90-day investment horizon International Game Technology is expected to under-perform the Hasbro. In addition to that, International Game is 1.17 times more volatile than Hasbro Inc. It trades about -0.01 of its total potential returns per unit of risk. Hasbro Inc is currently generating about 0.03 per unit of volatility. If you would invest  5,017  in Hasbro Inc on December 29, 2023 and sell it today you would earn a total of  631.00  from holding Hasbro Inc or generate 12.58% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

International Game Technology  vs.  Hasbro Inc

 Performance 
       Timeline  
International Game 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days International Game Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Hasbro Inc 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Hasbro Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hasbro unveiled solid returns over the last few months and may actually be approaching a breakup point.

International Game and Hasbro Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with International Game and Hasbro

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

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