Correlation Between Nintendo and Konami Holdings
Can any of the company-specific risk be diversified away by investing in both Nintendo and Konami Holdings 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 Konami Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nintendo Co ADR and Konami Holdings, you can compare the effects of market volatilities on Nintendo and Konami Holdings 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 Konami Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nintendo and Konami Holdings.
Diversification Opportunities for Nintendo and Konami Holdings
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nintendo and Konami is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Nintendo Co ADR and Konami Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konami 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 ADR are associated (or correlated) with Konami Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konami Holdings has no effect on the direction of Nintendo i.e., Nintendo and Konami Holdings go up and down completely randomly.
Pair Corralation between Nintendo and Konami Holdings
Assuming the 90 days horizon Nintendo Co ADR is expected to generate 1.15 times more return on investment than Konami Holdings. However, Nintendo is 1.15 times more volatile than Konami Holdings. It trades about 0.13 of its potential returns per unit of risk. Konami Holdings is currently generating about -0.06 per unit of risk. If you would invest 1,474 in Nintendo Co ADR on November 2, 2024 and sell it today you would earn a total of 161.00 from holding Nintendo Co ADR or generate 10.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Nintendo Co ADR vs. Konami Holdings
Performance |
| Timeline |
| Nintendo Co ADR |
| Konami Holdings |
Nintendo and Konami Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nintendo and Konami Holdings
The main advantage of trading using opposite Nintendo and Konami Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nintendo position performs unexpectedly, Konami Holdings 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 Konami Holdings will offset losses from the drop in Konami Holdings' long position.| Nintendo vs. Square Enix Holdings | Nintendo vs. Capcom Co Ltd | Nintendo vs. Electronic Arts | Nintendo vs. Roblox Corp |
| Konami Holdings vs. NEXON Co | Konami Holdings vs. Sega Sammy Holdings | Konami Holdings vs. Capcom Co Ltd | Konami Holdings vs. CD Projekt SA |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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