Correlation Between Bilibili and Nintendo
Can any of the company-specific risk be diversified away by investing in both Bilibili and Nintendo 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 Bilibili and Nintendo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bilibili and Nintendo Co, you can compare the effects of market volatilities on Bilibili and Nintendo 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 Bilibili with a short position of Nintendo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bilibili and Nintendo.
Diversification Opportunities for Bilibili and Nintendo
Good diversification
The 3 months correlation between Bilibili and Nintendo is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bilibili and Nintendo Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nintendo and Bilibili 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 Bilibili are associated (or correlated) with Nintendo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nintendo has no effect on the direction of Bilibili i.e., Bilibili and Nintendo go up and down completely randomly.
Pair Corralation between Bilibili and Nintendo
Assuming the 90 days trading horizon Bilibili is expected to generate 2.75 times more return on investment than Nintendo. However, Bilibili is 2.75 times more volatile than Nintendo Co. It trades about 0.07 of its potential returns per unit of risk. Nintendo Co is currently generating about 0.04 per unit of risk. If you would invest 1,400 in Bilibili on September 3, 2024 and sell it today you would earn a total of 490.00 from holding Bilibili or generate 35.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bilibili vs. Nintendo Co
Performance |
| Timeline |
| Bilibili |
| Nintendo |
Bilibili and Nintendo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bilibili and Nintendo
The main advantage of trading using opposite Bilibili and Nintendo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bilibili position performs unexpectedly, Nintendo 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 Nintendo will offset losses from the drop in Nintendo's long position.| Bilibili vs. Lion One Metals | Bilibili vs. AGRICULTBK HADR25 YC | Bilibili vs. Federal Agricultural Mortgage | Bilibili vs. HYDROFARM HLD GRP |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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