Correlation Between Activision Blizzard and Nintendo
Can any of the company-specific risk be diversified away by investing in both Activision Blizzard 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 Activision Blizzard and Nintendo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Activision Blizzard and Nintendo Co, you can compare the effects of market volatilities on Activision Blizzard 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 Activision Blizzard with a short position of Nintendo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Activision Blizzard and Nintendo.
Diversification Opportunities for Activision Blizzard and Nintendo
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Activision and Nintendo is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Activision Blizzard and Nintendo Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nintendo and Activision Blizzard 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 Activision Blizzard 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 Activision Blizzard i.e., Activision Blizzard and Nintendo go up and down completely randomly.
Pair Corralation between Activision Blizzard and Nintendo
If you would invest 5,499 in Nintendo Co on September 3, 2024 and sell it today you would earn a total of 301.00 from holding Nintendo Co or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Activision Blizzard vs. Nintendo Co
Performance |
| Timeline |
| Activision Blizzard |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nintendo |
Activision Blizzard and Nintendo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Activision Blizzard and Nintendo
The main advantage of trading using opposite Activision Blizzard and Nintendo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Activision Blizzard 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.| Activision Blizzard vs. Take Two Interactive Software | Activision Blizzard vs. Nintendo Co ADR | Activision Blizzard vs. NetEase | Activision Blizzard vs. Playtika Holding Corp |
| Nintendo vs. Take Two Interactive Software | Nintendo vs. Electronic Arts | Nintendo vs. UbiSoft Entertainment | Nintendo vs. Square Enix Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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