Correlation Between Nintendo and Sega Sammy
Can any of the company-specific risk be diversified away by investing in both Nintendo and Sega Sammy 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 Sega Sammy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nintendo Co and Sega Sammy Holdings, you can compare the effects of market volatilities on Nintendo and Sega Sammy 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 Sega Sammy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nintendo and Sega Sammy.
Diversification Opportunities for Nintendo and Sega Sammy
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nintendo and Sega is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Nintendo Co and Sega Sammy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sega Sammy Holdings 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 Sega Sammy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sega Sammy Holdings has no effect on the direction of Nintendo i.e., Nintendo and Sega Sammy go up and down completely randomly.
Pair Corralation between Nintendo and Sega Sammy
Assuming the 90 days horizon Nintendo Co is expected to generate 0.87 times more return on investment than Sega Sammy. However, Nintendo Co is 1.15 times less risky than Sega Sammy. It trades about 0.07 of its potential returns per unit of risk. Sega Sammy Holdings is currently generating about 0.02 per unit of risk. If you would invest 3,720 in Nintendo Co on November 2, 2024 and sell it today you would earn a total of 3,000 from holding Nintendo Co or generate 80.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Nintendo Co vs. Sega Sammy Holdings
Performance |
| Timeline |
| Nintendo |
| Sega Sammy Holdings |
Nintendo and Sega Sammy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nintendo and Sega Sammy
The main advantage of trading using opposite Nintendo and Sega Sammy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nintendo position performs unexpectedly, Sega Sammy 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 Sega Sammy will offset losses from the drop in Sega Sammy's long position.| Nintendo vs. Take Two Interactive Software | Nintendo vs. Electronic Arts | Nintendo vs. UbiSoft Entertainment | Nintendo vs. Square Enix Holdings |
| Sega Sammy vs. Nexon Co Ltd | Sega Sammy vs. Square Enix Holdings | Sega Sammy vs. Nintendo Co | Sega Sammy 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |