Correlation Between Playmates Toys and PLAY2CHILL

Can any of the company-specific risk be diversified away by investing in both Playmates Toys and PLAY2CHILL 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 Playmates Toys and PLAY2CHILL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Playmates Toys Limited and PLAY2CHILL SA ZY, you can compare the effects of market volatilities on Playmates Toys and PLAY2CHILL 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 Playmates Toys with a short position of PLAY2CHILL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playmates Toys and PLAY2CHILL.

Diversification Opportunities for Playmates Toys and PLAY2CHILL

0.04

Correlation Coefficient

Playmates Toys  PLAY2CHILL

Significant diversification

The 3 months correlation between Playmates and PLAY2CHILL is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Playmates Toys Limited and PLAY2CHILL SA ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAY2CHILL SA ZY and Playmates Toys 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 Playmates Toys Limited are associated (or correlated) with PLAY2CHILL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAY2CHILL SA ZY has no effect on the direction of Playmates Toys i.e., Playmates Toys and PLAY2CHILL go up and down completely randomly.

Pair Corralation between Playmates Toys and PLAY2CHILL

Assuming the 90 days horizon Playmates Toys is expected to generate 11.03 times less return on investment than PLAY2CHILL. But when comparing it to its historical volatility, Playmates Toys Limited is 1.18 times less risky than PLAY2CHILL. It trades about 0.02 of its potential returns per unit of risk. PLAY2CHILL SA ZY is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  64.00  in PLAY2CHILL SA ZY on May 7, 2025 and sell it today you would earn a total of  26.00  from holding PLAY2CHILL SA ZY or generate 40.63% return on investment over 90 days.

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

Playmates Toys Limited  vs.  PLAY2CHILL SA ZY

Playmates Toys

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Playmates Toys Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Playmates Toys is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

PLAY2CHILL SA ZY

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PLAY2CHILL SA ZY are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, PLAY2CHILL reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Playmates Toys and PLAY2CHILL

The main advantage of trading using opposite Playmates Toys and PLAY2CHILL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playmates Toys position performs unexpectedly, PLAY2CHILL 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 PLAY2CHILL will offset losses from the drop in PLAY2CHILL's long position.

The idea behind Playmates Toys Limited and PLAY2CHILL SA ZY 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.