Correlation Between Mixi and Capcom Co
Can any of the company-specific risk be diversified away by investing in both Mixi 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 Mixi and Capcom Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mixi Inc and Capcom Co, you can compare the effects of market volatilities on Mixi 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 Mixi with a short position of Capcom Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mixi and Capcom Co.
Diversification Opportunities for Mixi and Capcom Co
Weak diversification
The 3 months correlation between Mixi and Capcom is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mixi Inc and Capcom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capcom Co and Mixi 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 Mixi 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 Mixi i.e., Mixi and Capcom Co go up and down completely randomly.
Pair Corralation between Mixi and Capcom Co
Assuming the 90 days horizon Mixi is expected to generate 126.71 times less return on investment than Capcom Co. But when comparing it to its historical volatility, Mixi Inc is 17.22 times less risky than Capcom Co. It trades about 0.01 of its potential returns per unit of risk. Capcom Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,120 in Capcom Co on August 28, 2024 and sell it today you would lose (1,066) from holding Capcom Co or give up 34.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.62% |
| Values | Daily Returns |
Mixi Inc vs. Capcom Co
Performance |
| Timeline |
| Mixi Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Capcom Co |
Mixi and Capcom Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mixi and Capcom Co
The main advantage of trading using opposite Mixi and Capcom Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mixi 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 Mixi Inc and Capcom Co 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. Square Enix Holdings | Capcom Co vs. CD Projekt SA | Capcom Co vs. Sega Sammy Holdings | Capcom Co 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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