Correlation Between BANDAI NAMCO and BII Railway
Can any of the company-specific risk be diversified away by investing in both BANDAI NAMCO and BII Railway 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 BANDAI NAMCO and BII Railway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANDAI NAMCO Holdings and BII Railway Transportation, you can compare the effects of market volatilities on BANDAI NAMCO and BII Railway 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 BANDAI NAMCO with a short position of BII Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANDAI NAMCO and BII Railway.
Diversification Opportunities for BANDAI NAMCO and BII Railway
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BANDAI and BII is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding BANDAI NAMCO Holdings and BII Railway Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BII Railway Transpor and BANDAI NAMCO 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 BANDAI NAMCO Holdings are associated (or correlated) with BII Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BII Railway Transpor has no effect on the direction of BANDAI NAMCO i.e., BANDAI NAMCO and BII Railway go up and down completely randomly.
Pair Corralation between BANDAI NAMCO and BII Railway
Assuming the 90 days horizon BANDAI NAMCO Holdings is expected to generate 1.77 times more return on investment than BII Railway. However, BANDAI NAMCO is 1.77 times more volatile than BII Railway Transportation. It trades about 0.31 of its potential returns per unit of risk. BII Railway Transportation is currently generating about 0.36 per unit of risk. If you would invest 2,031 in BANDAI NAMCO Holdings on October 9, 2024 and sell it today you would earn a total of 233.00 from holding BANDAI NAMCO Holdings or generate 11.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANDAI NAMCO Holdings vs. BII Railway Transportation
Performance |
| Timeline |
| BANDAI NAMCO Holdings |
| BII Railway Transpor |
BANDAI NAMCO and BII Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANDAI NAMCO and BII Railway
The main advantage of trading using opposite BANDAI NAMCO and BII Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANDAI NAMCO position performs unexpectedly, BII Railway 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 BII Railway will offset losses from the drop in BII Railway's long position.| BANDAI NAMCO vs. JSC Halyk bank | BANDAI NAMCO vs. PNC Financial Services | BANDAI NAMCO vs. Corporate Office Properties | BANDAI NAMCO vs. IDP EDUCATION LTD |
| BII Railway vs. Media and Games | BII Railway vs. Merit Medical Systems | BII Railway vs. QINGCI GAMES INC | BII Railway vs. Microbot Medical |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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