Correlation Between COFCO Joycome and BANDAI NAMCO
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and BANDAI NAMCO 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 COFCO Joycome and BANDAI NAMCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and BANDAI NAMCO Holdings, you can compare the effects of market volatilities on COFCO Joycome and BANDAI NAMCO 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 COFCO Joycome with a short position of BANDAI NAMCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and BANDAI NAMCO.
Diversification Opportunities for COFCO Joycome and BANDAI NAMCO
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between COFCO and BANDAI is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and BANDAI NAMCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANDAI NAMCO Holdings and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with BANDAI NAMCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANDAI NAMCO Holdings has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and BANDAI NAMCO go up and down completely randomly.
Pair Corralation between COFCO Joycome and BANDAI NAMCO
Assuming the 90 days horizon COFCO Joycome is expected to generate 26.69 times less return on investment than BANDAI NAMCO. But when comparing it to its historical volatility, COFCO Joycome Foods is 2.35 times less risky than BANDAI NAMCO. It trades about 0.01 of its potential returns per unit of risk. BANDAI NAMCO Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 841.00 in BANDAI NAMCO Holdings on December 4, 2024 and sell it today you would earn a total of 2,336 from holding BANDAI NAMCO Holdings or generate 277.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COFCO Joycome Foods vs. BANDAI NAMCO Holdings
Performance |
| Timeline |
| COFCO Joycome Foods |
| BANDAI NAMCO Holdings |
COFCO Joycome and BANDAI NAMCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and BANDAI NAMCO
The main advantage of trading using opposite COFCO Joycome and BANDAI NAMCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, BANDAI NAMCO 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 BANDAI NAMCO will offset losses from the drop in BANDAI NAMCO's long position.| COFCO Joycome vs. Scottish Mortgage Investment | COFCO Joycome vs. MTI INVESTMENT SE | COFCO Joycome vs. CHRYSALIS INVESTMENTS LTD | COFCO Joycome vs. PACIFIC ONLINE |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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