Correlation Between Nintendo and Playtika Holding
Can any of the company-specific risk be diversified away by investing in both Nintendo and Playtika Holding 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 Playtika Holding 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 Playtika Holding Corp, you can compare the effects of market volatilities on Nintendo and Playtika Holding 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 Playtika Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nintendo and Playtika Holding.
Diversification Opportunities for Nintendo and Playtika Holding
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nintendo and Playtika is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Nintendo Co ADR and Playtika Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtika Holding Corp 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 Playtika Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtika Holding Corp has no effect on the direction of Nintendo i.e., Nintendo and Playtika Holding go up and down completely randomly.
Pair Corralation between Nintendo and Playtika Holding
Assuming the 90 days horizon Nintendo Co ADR is expected to generate 0.97 times more return on investment than Playtika Holding. However, Nintendo Co ADR is 1.03 times less risky than Playtika Holding. It trades about 0.02 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about -0.01 per unit of risk. If you would invest 1,373 in Nintendo Co ADR on August 30, 2024 and sell it today you would earn a total of 23.00 from holding Nintendo Co ADR or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nintendo Co ADR vs. Playtika Holding Corp
Performance |
| Timeline |
| Nintendo Co ADR |
| Playtika Holding Corp |
Nintendo and Playtika Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nintendo and Playtika Holding
The main advantage of trading using opposite Nintendo and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nintendo position performs unexpectedly, Playtika Holding 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 Playtika Holding will offset losses from the drop in Playtika Holding's long position.| Nintendo vs. Square Enix Holdings | Nintendo vs. Capcom Co Ltd | Nintendo vs. Electronic Arts | Nintendo vs. Roblox Corp |
| Playtika Holding vs. SohuCom | Playtika Holding vs. Snail, Class A | Playtika Holding vs. i3 Interactive | Playtika Holding vs. Bragg Gaming Group |
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 Stocks Directory module to find actively traded stocks across global markets.
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