Correlation Between IGG and Capcom Co
Can any of the company-specific risk be diversified away by investing in both IGG and Capcom Co 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 IGG and Capcom Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGG Inc and Capcom Co Ltd, you can compare the effects of market volatilities on IGG and Capcom Co 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 IGG with a short position of Capcom Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGG and Capcom Co.
Diversification Opportunities for IGG and Capcom Co
Very good diversification
The 3 months correlation between IGG and Capcom is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding IGG Inc and Capcom Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capcom Co and IGG 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 IGG Inc are associated (or correlated) with Capcom Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capcom Co has no effect on the direction of IGG i.e., IGG and Capcom Co go up and down completely randomly.
Pair Corralation between IGG and Capcom Co
Assuming the 90 days horizon IGG Inc is expected to under-perform the Capcom Co. But the pink sheet apears to be less risky and, when comparing its historical volatility, IGG Inc is 1.19 times less risky than Capcom Co. The pink sheet trades about -0.21 of its potential returns per unit of risk. The Capcom Co Ltd is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 998.00 in Capcom Co Ltd on September 2, 2024 and sell it today you would earn a total of 171.00 from holding Capcom Co Ltd or generate 17.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
IGG Inc vs. Capcom Co Ltd
Performance |
| Timeline |
| IGG Inc |
| Capcom Co |
IGG and Capcom Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGG and Capcom Co
The main advantage of trading using opposite IGG and Capcom Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGG position performs unexpectedly, Capcom Co 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 Capcom Co will offset losses from the drop in Capcom Co's long position.The idea behind IGG Inc and Capcom Co Ltd 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.| Capcom Co vs. CD Projekt SA | Capcom Co vs. Playtika Holding Corp | Capcom Co vs. Square Enix Holdings | Capcom Co vs. Nexon Co Ltd |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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