Correlation Between Nintendo and EAST SIDE
Can any of the company-specific risk be diversified away by investing in both Nintendo and EAST SIDE 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 EAST SIDE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nintendo Co and EAST SIDE GAMES, you can compare the effects of market volatilities on Nintendo and EAST SIDE 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 EAST SIDE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nintendo and EAST SIDE.
Diversification Opportunities for Nintendo and EAST SIDE
Excellent diversification
The 3 months correlation between Nintendo and EAST is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nintendo Co and EAST SIDE GAMES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EAST SIDE GAMES 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 EAST SIDE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EAST SIDE GAMES has no effect on the direction of Nintendo i.e., Nintendo and EAST SIDE go up and down completely randomly.
Pair Corralation between Nintendo and EAST SIDE
Assuming the 90 days trading horizon Nintendo is expected to generate 2.11 times less return on investment than EAST SIDE. But when comparing it to its historical volatility, Nintendo Co is 2.62 times less risky than EAST SIDE. It trades about 0.06 of its potential returns per unit of risk. EAST SIDE GAMES is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 28.00 in EAST SIDE GAMES on September 4, 2024 and sell it today you would earn a total of 8.00 from holding EAST SIDE GAMES or generate 28.57% 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. EAST SIDE GAMES
Performance |
| Timeline |
| Nintendo |
| EAST SIDE GAMES |
Nintendo and EAST SIDE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nintendo and EAST SIDE
The main advantage of trading using opposite Nintendo and EAST SIDE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nintendo position performs unexpectedly, EAST SIDE 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 EAST SIDE will offset losses from the drop in EAST SIDE's long position.| Nintendo vs. ADRIATIC METALS LS 013355 | Nintendo vs. Cleanaway Waste Management | Nintendo vs. ALERION CLEANPOWER | Nintendo vs. ePlay Digital |
| EAST SIDE vs. Nintendo Co | EAST SIDE vs. Nintendo Co | EAST SIDE vs. Sea Limited | EAST SIDE vs. Take Two Interactive Software |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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