Correlation Between Roblox Corp and Nintendo
Can any of the company-specific risk be diversified away by investing in both Roblox Corp 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 Roblox Corp and Nintendo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roblox Corp and Nintendo Co, you can compare the effects of market volatilities on Roblox Corp 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 Roblox Corp with a short position of Nintendo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roblox Corp and Nintendo.
Diversification Opportunities for Roblox Corp and Nintendo
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Roblox and Nintendo is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Roblox Corp and Nintendo Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nintendo and Roblox Corp 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 Roblox Corp 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 Roblox Corp i.e., Roblox Corp and Nintendo go up and down completely randomly.
Pair Corralation between Roblox Corp and Nintendo
Given the investment horizon of 90 days Roblox Corp is expected to generate 1.32 times more return on investment than Nintendo. However, Roblox Corp is 1.32 times more volatile than Nintendo Co. It trades about 0.25 of its potential returns per unit of risk. Nintendo Co is currently generating about 0.11 per unit of risk. If you would invest 4,230 in Roblox Corp on October 26, 2024 and sell it today you would earn a total of 2,481 from holding Roblox Corp or generate 58.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roblox Corp vs. Nintendo Co
Performance |
| Timeline |
| Roblox Corp |
| Nintendo |
Roblox Corp and Nintendo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roblox Corp and Nintendo
The main advantage of trading using opposite Roblox Corp and Nintendo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roblox Corp 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.| Roblox Corp vs. Electronic Arts | Roblox Corp vs. Take Two Interactive Software | Roblox Corp vs. Nintendo Co ADR | Roblox Corp vs. NetEase |
| Nintendo vs. Take Two Interactive Software | Nintendo vs. Electronic Arts | Nintendo vs. UbiSoft Entertainment | Nintendo vs. Square Enix 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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