Correlation Between Nintendo and Bilibili
Can any of the company-specific risk be diversified away by investing in both Nintendo and Bilibili 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 Bilibili into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nintendo Co and Bilibili, you can compare the effects of market volatilities on Nintendo and Bilibili 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 Bilibili. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nintendo and Bilibili.
Diversification Opportunities for Nintendo and Bilibili
Good diversification
The 3 months correlation between Nintendo and Bilibili is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Nintendo Co and Bilibili in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilibili 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 Bilibili. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilibili has no effect on the direction of Nintendo i.e., Nintendo and Bilibili go up and down completely randomly.
Pair Corralation between Nintendo and Bilibili
Assuming the 90 days horizon Nintendo Co is expected to generate 0.38 times more return on investment than Bilibili. However, Nintendo Co is 2.6 times less risky than Bilibili. It trades about 0.05 of its potential returns per unit of risk. Bilibili is currently generating about 0.01 per unit of risk. If you would invest 3,945 in Nintendo Co on September 2, 2024 and sell it today you would earn a total of 1,499 from holding Nintendo Co or generate 38.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nintendo Co vs. Bilibili
Performance |
| Timeline |
| Nintendo |
| Bilibili |
Nintendo and Bilibili Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nintendo and Bilibili
The main advantage of trading using opposite Nintendo and Bilibili positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nintendo position performs unexpectedly, Bilibili 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 Bilibili will offset losses from the drop in Bilibili's long position.| Nintendo vs. GLG LIFE TECH | Nintendo vs. WisdomTree Investments | Nintendo vs. FARO Technologies | Nintendo vs. Virtus Investment Partners |
| Bilibili vs. Nintendo Co | Bilibili vs. Sea Limited | Bilibili vs. Superior Plus Corp | Bilibili vs. NMI 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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