Correlation Between Sega Sammy and Square Enix
Can any of the company-specific risk be diversified away by investing in both Sega Sammy and Square Enix 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 Sega Sammy and Square Enix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sega Sammy Holdings and Square Enix Holdings, you can compare the effects of market volatilities on Sega Sammy and Square Enix 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 Sega Sammy with a short position of Square Enix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sega Sammy and Square Enix.
Diversification Opportunities for Sega Sammy and Square Enix
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sega and Square is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sega Sammy Holdings and Square Enix Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Square Enix Holdings and Sega Sammy 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 Sega Sammy Holdings are associated (or correlated) with Square Enix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Square Enix Holdings has no effect on the direction of Sega Sammy i.e., Sega Sammy and Square Enix go up and down completely randomly.
Pair Corralation between Sega Sammy and Square Enix
Assuming the 90 days horizon Sega Sammy Holdings is expected to generate 1.06 times more return on investment than Square Enix. However, Sega Sammy is 1.06 times more volatile than Square Enix Holdings. It trades about 0.03 of its potential returns per unit of risk. Square Enix Holdings is currently generating about 0.0 per unit of risk. If you would invest 335.00 in Sega Sammy Holdings on August 28, 2024 and sell it today you would earn a total of 104.00 from holding Sega Sammy Holdings or generate 31.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.98% |
| Values | Daily Returns |
Sega Sammy Holdings vs. Square Enix Holdings
Performance |
| Timeline |
| Sega Sammy Holdings |
| Square Enix Holdings |
Sega Sammy and Square Enix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sega Sammy and Square Enix
The main advantage of trading using opposite Sega Sammy and Square Enix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sega Sammy position performs unexpectedly, Square Enix 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 Square Enix will offset losses from the drop in Square Enix's long position.| Sega Sammy vs. Nexon Co Ltd | Sega Sammy vs. Square Enix Holdings | Sega Sammy vs. Nintendo Co | Sega Sammy vs. Square Enix Holdings |
| Square Enix vs. GDEV Inc | Square Enix vs. Doubledown Interactive Co | Square Enix vs. Playstudios | Square Enix 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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