Correlation Between Peloton Interactive and BANDAI NAMCO
Can any of the company-specific risk be diversified away by investing in both Peloton Interactive and BANDAI NAMCO 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 Peloton Interactive and BANDAI NAMCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peloton Interactive and BANDAI NAMCO Holdings, you can compare the effects of market volatilities on Peloton Interactive and BANDAI NAMCO 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 Peloton Interactive with a short position of BANDAI NAMCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peloton Interactive and BANDAI NAMCO.
Diversification Opportunities for Peloton Interactive and BANDAI NAMCO
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Peloton and BANDAI is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Peloton Interactive and BANDAI NAMCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANDAI NAMCO Holdings and Peloton Interactive 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 Peloton Interactive are associated (or correlated) with BANDAI NAMCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANDAI NAMCO Holdings has no effect on the direction of Peloton Interactive i.e., Peloton Interactive and BANDAI NAMCO go up and down completely randomly.
Pair Corralation between Peloton Interactive and BANDAI NAMCO
Given the investment horizon of 90 days Peloton Interactive is expected to generate 4.52 times less return on investment than BANDAI NAMCO. But when comparing it to its historical volatility, Peloton Interactive is 3.41 times less risky than BANDAI NAMCO. It trades about 0.03 of its potential returns per unit of risk. BANDAI NAMCO Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,148 in BANDAI NAMCO Holdings on August 31, 2024 and sell it today you would lose (4,028) from holding BANDAI NAMCO Holdings or give up 65.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 63.18% |
| Values | Daily Returns |
Peloton Interactive vs. BANDAI NAMCO Holdings
Performance |
| Timeline |
| Peloton Interactive |
| BANDAI NAMCO Holdings |
Peloton Interactive and BANDAI NAMCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peloton Interactive and BANDAI NAMCO
The main advantage of trading using opposite Peloton Interactive and BANDAI NAMCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peloton Interactive position performs unexpectedly, BANDAI NAMCO 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 BANDAI NAMCO will offset losses from the drop in BANDAI NAMCO's long position.| Peloton Interactive vs. Zoom Video Communications | Peloton Interactive vs. DocuSign | Peloton Interactive vs. Pinterest | Peloton Interactive vs. Teladoc |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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