Correlation Between Nintendo and STILLFRONT GRP

Can any of the company-specific risk be diversified away by investing in both Nintendo and STILLFRONT GRP 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 Nintendo and STILLFRONT GRP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nintendo Co and STILLFRONT GRP AB, you can compare the effects of market volatilities on Nintendo and STILLFRONT GRP 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 Nintendo with a short position of STILLFRONT GRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nintendo and STILLFRONT GRP.

Diversification Opportunities for Nintendo and STILLFRONT GRP

0.79

Correlation Coefficient

Nintendo  STILLFRONT GRP

Poor diversification

The 3 months correlation between Nintendo and STILLFRONT is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Nintendo Co and STILLFRONT GRP AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STILLFRONT GRP AB and Nintendo 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 Nintendo Co are associated (or correlated) with STILLFRONT GRP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STILLFRONT GRP AB has no effect on the direction of Nintendo i.e., Nintendo and STILLFRONT GRP go up and down completely randomly.

Pair Corralation between Nintendo and STILLFRONT GRP

Assuming the 90 days horizon Nintendo is expected to generate 12.45 times less return on investment than STILLFRONT GRP. But when comparing it to its historical volatility, Nintendo Co is 1.5 times less risky than STILLFRONT GRP. It trades about 0.04 of its potential returns per unit of risk. STILLFRONT GRP AB is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  63.00  in STILLFRONT GRP AB on October 2, 2024 and sell it today you would earn a total of  11.00  from holding STILLFRONT GRP AB or generate 17.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.74%
Values	Daily Returns

Nintendo Co  vs.  STILLFRONT GRP AB

Nintendo

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nintendo Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Nintendo reported solid returns over the last few months and may actually be approaching a breakup point.

STILLFRONT GRP AB

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in STILLFRONT GRP AB are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, STILLFRONT GRP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nintendo and STILLFRONT GRP

The main advantage of trading using opposite Nintendo and STILLFRONT GRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nintendo position performs unexpectedly, STILLFRONT GRP 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 STILLFRONT GRP will offset losses from the drop in STILLFRONT GRP's long position.

The idea behind Nintendo Co and STILLFRONT GRP AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.