Correlation Between Square Enix and SohuCom
Can any of the company-specific risk be diversified away by investing in both Square Enix and SohuCom 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 Square Enix and SohuCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Square Enix Holdings and SohuCom, you can compare the effects of market volatilities on Square Enix and SohuCom 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 Square Enix with a short position of SohuCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Square Enix and SohuCom.
Diversification Opportunities for Square Enix and SohuCom
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Square and SohuCom is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Square Enix Holdings and SohuCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SohuCom and Square Enix 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 Square Enix Holdings are associated (or correlated) with SohuCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SohuCom has no effect on the direction of Square Enix i.e., Square Enix and SohuCom go up and down completely randomly.
Pair Corralation between Square Enix and SohuCom
Assuming the 90 days horizon Square Enix Holdings is expected to under-perform the SohuCom. In addition to that, Square Enix is 1.33 times more volatile than SohuCom. It trades about -0.06 of its total potential returns per unit of risk. SohuCom is currently generating about -0.05 per unit of volatility. If you would invest 1,287 in SohuCom on November 3, 2024 and sell it today you would lose (28.00) from holding SohuCom or give up 2.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Square Enix Holdings vs. SohuCom
Performance |
| Timeline |
| Square Enix Holdings |
| SohuCom |
Square Enix and SohuCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Square Enix and SohuCom
The main advantage of trading using opposite Square Enix and SohuCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Square Enix position performs unexpectedly, SohuCom 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 SohuCom will offset losses from the drop in SohuCom's long position.| Square Enix vs. CD Projekt SA | Square Enix vs. Sega Sammy Holdings | Square Enix vs. Capcom Co Ltd | Square Enix vs. Embracer Group AB |
| SohuCom vs. Snail, Class A | SohuCom vs. Playstudios | SohuCom vs. Playtika Holding Corp | SohuCom vs. Doubledown Interactive Co |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |