Correlation Between Nintendo and Orient Overseas
Can any of the company-specific risk be diversified away by investing in both Nintendo and Orient Overseas 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 Nintendo and Orient Overseas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nintendo Co and Orient Overseas International, you can compare the effects of market volatilities on Nintendo and Orient Overseas 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 Nintendo with a short position of Orient Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nintendo and Orient Overseas.
Diversification Opportunities for Nintendo and Orient Overseas
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nintendo and Orient is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nintendo Co and Orient Overseas International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Overseas Inte and Nintendo 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 Nintendo Co are associated (or correlated) with Orient Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Overseas Inte has no effect on the direction of Nintendo i.e., Nintendo and Orient Overseas go up and down completely randomly.
Pair Corralation between Nintendo and Orient Overseas
Assuming the 90 days horizon Nintendo is expected to generate 2.38 times less return on investment than Orient Overseas. But when comparing it to its historical volatility, Nintendo Co is 1.16 times less risky than Orient Overseas. It trades about 0.04 of its potential returns per unit of risk. Orient Overseas International is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 6,500 in Orient Overseas International on October 21, 2024 and sell it today you would earn a total of 269.00 from holding Orient Overseas International or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nintendo Co vs. Orient Overseas International
Performance |
| Timeline |
| Nintendo |
| Orient Overseas Inte |
Nintendo and Orient Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nintendo and Orient Overseas
The main advantage of trading using opposite Nintendo and Orient Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nintendo position performs unexpectedly, Orient Overseas 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 Orient Overseas will offset losses from the drop in Orient Overseas' long position.| Nintendo vs. Take Two Interactive Software | Nintendo vs. Electronic Arts | Nintendo vs. UbiSoft Entertainment | Nintendo vs. Square Enix Holdings |
| Orient Overseas vs. SITC International Holdings | Orient Overseas vs. SITC International Holdings | Orient Overseas vs. Mitsui OSK Lines | Orient Overseas vs. Pacific Basin Shipping |
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 Correlations module to find global opportunities by holding instruments from different markets.
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