Correlation Between BANDAI NAMCO and Shimano
Can any of the company-specific risk be diversified away by investing in both BANDAI NAMCO and Shimano 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 Shimano 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 Shimano Inc ADR, you can compare the effects of market volatilities on BANDAI NAMCO and Shimano 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 Shimano. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANDAI NAMCO and Shimano.
Diversification Opportunities for BANDAI NAMCO and Shimano
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANDAI and Shimano is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding BANDAI NAMCO Holdings and Shimano Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimano Inc ADR 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 Shimano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimano Inc ADR has no effect on the direction of BANDAI NAMCO i.e., BANDAI NAMCO and Shimano go up and down completely randomly.
Pair Corralation between BANDAI NAMCO and Shimano
Assuming the 90 days horizon BANDAI NAMCO Holdings is expected to under-perform the Shimano. In addition to that, BANDAI NAMCO is 1.01 times more volatile than Shimano Inc ADR. It trades about -0.21 of its total potential returns per unit of risk. Shimano Inc ADR is currently generating about -0.09 per unit of volatility. If you would invest 1,360 in Shimano Inc ADR on October 26, 2024 and sell it today you would lose (31.00) from holding Shimano Inc ADR or give up 2.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANDAI NAMCO Holdings vs. Shimano Inc ADR
Performance |
| Timeline |
| BANDAI NAMCO Holdings |
| Shimano Inc ADR |
BANDAI NAMCO and Shimano Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANDAI NAMCO and Shimano
The main advantage of trading using opposite BANDAI NAMCO and Shimano positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANDAI NAMCO position performs unexpectedly, Shimano 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 Shimano will offset losses from the drop in Shimano's long position.| BANDAI NAMCO vs. Shimano Inc ADR | BANDAI NAMCO vs. Hasbro Inc | BANDAI NAMCO vs. YETI Holdings | BANDAI NAMCO vs. Shimano |
| Shimano vs. Callaway Golf | Shimano vs. Peloton Interactive | Shimano vs. BANDAI NAMCO Holdings | Shimano vs. Nikon Corp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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