Correlation Between Nintendo and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both Nintendo and XLMedia PLC 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 XLMedia PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nintendo Co and XLMedia PLC, you can compare the effects of market volatilities on Nintendo and XLMedia PLC 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 XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nintendo and XLMedia PLC.
Diversification Opportunities for Nintendo and XLMedia PLC
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nintendo and XLMedia is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Nintendo Co and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia PLC 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 XLMedia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XLMedia PLC has no effect on the direction of Nintendo i.e., Nintendo and XLMedia PLC go up and down completely randomly.
Pair Corralation between Nintendo and XLMedia PLC
Assuming the 90 days horizon Nintendo is expected to generate 1.71 times less return on investment than XLMedia PLC. But when comparing it to its historical volatility, Nintendo Co is 1.87 times less risky than XLMedia PLC. It trades about 0.2 of its potential returns per unit of risk. XLMedia PLC is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 9.90 in XLMedia PLC on November 3, 2024 and sell it today you would earn a total of 2.10 from holding XLMedia PLC or generate 21.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nintendo Co vs. XLMedia PLC
Performance |
| Timeline |
| Nintendo |
| XLMedia PLC |
Nintendo and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nintendo and XLMedia PLC
The main advantage of trading using opposite Nintendo and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nintendo position performs unexpectedly, XLMedia PLC 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 XLMedia PLC will offset losses from the drop in XLMedia PLC's long position.| Nintendo vs. Granite Construction | Nintendo vs. ANGLO ASIAN MINING | Nintendo vs. FARM 51 GROUP | Nintendo vs. Sumitomo Mitsui Construction |
| XLMedia PLC vs. TROPHY GAMES DEV | XLMedia PLC vs. Scientific Games | XLMedia PLC vs. DETALION GAMES SA | XLMedia PLC vs. FIRST SHIP LEASE |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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