Correlation Between Nintendo and TROPHY GAMES
Can any of the company-specific risk be diversified away by investing in both Nintendo and TROPHY GAMES 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 TROPHY GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nintendo Co and TROPHY GAMES DEV, you can compare the effects of market volatilities on Nintendo and TROPHY GAMES 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 TROPHY GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nintendo and TROPHY GAMES.
Diversification Opportunities for Nintendo and TROPHY GAMES
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nintendo and TROPHY is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Nintendo Co and TROPHY GAMES DEV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TROPHY GAMES DEV 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 TROPHY GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TROPHY GAMES DEV has no effect on the direction of Nintendo i.e., Nintendo and TROPHY GAMES go up and down completely randomly.
Pair Corralation between Nintendo and TROPHY GAMES
Assuming the 90 days horizon Nintendo Co is expected to generate 0.69 times more return on investment than TROPHY GAMES. However, Nintendo Co is 1.45 times less risky than TROPHY GAMES. It trades about 0.25 of its potential returns per unit of risk. TROPHY GAMES DEV is currently generating about -0.07 per unit of risk. If you would invest 5,018 in Nintendo Co on October 19, 2024 and sell it today you would earn a total of 1,044 from holding Nintendo Co or generate 20.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nintendo Co vs. TROPHY GAMES DEV
Performance |
| Timeline |
| Nintendo |
| TROPHY GAMES DEV |
Nintendo and TROPHY GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nintendo and TROPHY GAMES
The main advantage of trading using opposite Nintendo and TROPHY GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nintendo position performs unexpectedly, TROPHY GAMES 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 TROPHY GAMES will offset losses from the drop in TROPHY GAMES's long position.The idea behind Nintendo Co and TROPHY GAMES DEV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| TROPHY GAMES vs. MidCap Financial Investment | TROPHY GAMES vs. Taylor Morrison Home | TROPHY GAMES vs. AGNC INVESTMENT | TROPHY GAMES vs. Neinor Homes 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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