Correlation Between GDEV and Square Enix
Can any of the company-specific risk be diversified away by investing in both GDEV and Square Enix 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 GDEV and Square Enix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GDEV Inc and Square Enix Holdings, you can compare the effects of market volatilities on GDEV and Square Enix 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 GDEV with a short position of Square Enix. Check out your portfolio center. Please also check ongoing floating volatility patterns of GDEV and Square Enix.
Diversification Opportunities for GDEV and Square Enix
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GDEV and Square is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding GDEV Inc and Square Enix Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Square Enix Holdings and GDEV 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 GDEV Inc are associated (or correlated) with Square Enix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Square Enix Holdings has no effect on the direction of GDEV i.e., GDEV and Square Enix go up and down completely randomly.
Pair Corralation between GDEV and Square Enix
Given the investment horizon of 90 days GDEV Inc is expected to under-perform the Square Enix. In addition to that, GDEV is 2.67 times more volatile than Square Enix Holdings. It trades about 0.0 of its total potential returns per unit of risk. Square Enix Holdings is currently generating about 0.0 per unit of volatility. If you would invest 2,291 in Square Enix Holdings on August 31, 2024 and sell it today you would lose (291.00) from holding Square Enix Holdings or give up 12.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.7% |
| Values | Daily Returns |
GDEV Inc vs. Square Enix Holdings
Performance |
| Timeline |
| GDEV Inc |
| Square Enix Holdings |
GDEV and Square Enix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GDEV and Square Enix
The main advantage of trading using opposite GDEV and Square Enix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GDEV position performs unexpectedly, Square Enix 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 Square Enix will offset losses from the drop in Square Enix's long position.The idea behind GDEV Inc and Square Enix Holdings 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.| Square Enix vs. Sega Sammy Holdings | Square Enix vs. Capcom Co Ltd | Square Enix vs. Capcom Co | Square Enix vs. CD Projekt SA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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