Correlation Between CD Projekt and Nintendo
Can any of the company-specific risk be diversified away by investing in both CD Projekt and Nintendo 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 CD Projekt and Nintendo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CD Projekt SA and Nintendo Co, you can compare the effects of market volatilities on CD Projekt and Nintendo 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 CD Projekt with a short position of Nintendo. Check out your portfolio center. Please also check ongoing floating volatility patterns of CD Projekt and Nintendo.
Diversification Opportunities for CD Projekt and Nintendo
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OTGLY and Nintendo is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CD Projekt SA and Nintendo Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nintendo and CD Projekt 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 CD Projekt SA are associated (or correlated) with Nintendo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nintendo has no effect on the direction of CD Projekt i.e., CD Projekt and Nintendo go up and down completely randomly.
Pair Corralation between CD Projekt and Nintendo
Assuming the 90 days horizon CD Projekt SA is expected to generate 1.19 times more return on investment than Nintendo. However, CD Projekt is 1.19 times more volatile than Nintendo Co. It trades about 0.04 of its potential returns per unit of risk. Nintendo Co is currently generating about 0.03 per unit of risk. If you would invest 708.00 in CD Projekt SA on August 28, 2024 and sell it today you would earn a total of 329.00 from holding CD Projekt SA or generate 46.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CD Projekt SA vs. Nintendo Co
Performance |
| Timeline |
| CD Projekt SA |
| Nintendo |
CD Projekt and Nintendo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CD Projekt and Nintendo
The main advantage of trading using opposite CD Projekt and Nintendo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CD Projekt position performs unexpectedly, Nintendo 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 Nintendo will offset losses from the drop in Nintendo's long position.| CD Projekt vs. Square Enix Holdings | CD Projekt vs. Capcom Co | CD Projekt vs. Sega Sammy Holdings | CD Projekt vs. Square Enix Holdings |
| Nintendo vs. GDEV Inc | Nintendo vs. Doubledown Interactive Co | Nintendo vs. Playstudios | Nintendo vs. SohuCom |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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