Correlation Between Hasbro and BioMérieux
Can any of the company-specific risk be diversified away by investing in both Hasbro and BioMérieux 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 BioMérieux into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hasbro Inc and bioMrieux SA, you can compare the effects of market volatilities on Hasbro and BioMérieux 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 BioMérieux. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hasbro and BioMérieux.
Diversification Opportunities for Hasbro and BioMérieux
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hasbro and BioMérieux is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro Inc and bioMrieux SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on bioMrieux SA 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 BioMérieux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of bioMrieux SA has no effect on the direction of Hasbro i.e., Hasbro and BioMérieux go up and down completely randomly.
Pair Corralation between Hasbro and BioMérieux
Considering the 90-day investment horizon Hasbro Inc is expected to generate 0.89 times more return on investment than BioMérieux. However, Hasbro Inc is 1.13 times less risky than BioMérieux. It trades about 0.13 of its potential returns per unit of risk. bioMrieux SA is currently generating about 0.06 per unit of risk. If you would invest 5,696 in Hasbro Inc on February 7, 2024 and sell it today you would earn a total of 452.00 from holding Hasbro Inc or generate 7.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hasbro Inc vs. bioMrieux SA
Performance |
Timeline |
Hasbro Inc |
bioMrieux SA |
Hasbro and BioMérieux Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hasbro and BioMérieux
The main advantage of trading using opposite Hasbro and BioMérieux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hasbro position performs unexpectedly, BioMérieux 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 BioMérieux will offset losses from the drop in BioMérieux's long position.Hasbro vs. Planet Fitness | Hasbro vs. Funko Inc | Hasbro vs. Cedar Fair LP | Hasbro vs. OneSpaWorld Holdings |
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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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