Correlation Between GAMESTOP and NKSJ HOLDINGS
Can any of the company-specific risk be diversified away by investing in both GAMESTOP and NKSJ HOLDINGS 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 GAMESTOP and NKSJ HOLDINGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMESTOP and NKSJ HOLDINGS, you can compare the effects of market volatilities on GAMESTOP and NKSJ HOLDINGS 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 GAMESTOP with a short position of NKSJ HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMESTOP and NKSJ HOLDINGS.
Diversification Opportunities for GAMESTOP and NKSJ HOLDINGS
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GAMESTOP and NKSJ is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP and NKSJ HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NKSJ HOLDINGS and GAMESTOP 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 GAMESTOP are associated (or correlated) with NKSJ HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NKSJ HOLDINGS has no effect on the direction of GAMESTOP i.e., GAMESTOP and NKSJ HOLDINGS go up and down completely randomly.
Pair Corralation between GAMESTOP and NKSJ HOLDINGS
Assuming the 90 days trading horizon GAMESTOP is expected to generate 2.82 times less return on investment than NKSJ HOLDINGS. In addition to that, GAMESTOP is 1.06 times more volatile than NKSJ HOLDINGS. It trades about 0.09 of its total potential returns per unit of risk. NKSJ HOLDINGS is currently generating about 0.28 per unit of volatility. If you would invest 2,100 in NKSJ HOLDINGS on September 12, 2024 and sell it today you would earn a total of 500.00 from holding NKSJ HOLDINGS or generate 23.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMESTOP vs. NKSJ HOLDINGS
Performance |
| Timeline |
| GAMESTOP |
| NKSJ HOLDINGS |
GAMESTOP and NKSJ HOLDINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMESTOP and NKSJ HOLDINGS
The main advantage of trading using opposite GAMESTOP and NKSJ HOLDINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMESTOP position performs unexpectedly, NKSJ HOLDINGS 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 NKSJ HOLDINGS will offset losses from the drop in NKSJ HOLDINGS's long position.The idea behind GAMESTOP and NKSJ 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.| NKSJ HOLDINGS vs. BURLINGTON STORES | NKSJ HOLDINGS vs. MARKET VECTR RETAIL | NKSJ HOLDINGS vs. Transportadora de Gas | NKSJ HOLDINGS vs. Transport International 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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