Correlation Between Sega Sammy and Leaf Mobile

Can any of the company-specific risk be diversified away by investing in both Sega Sammy and Leaf Mobile 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 Leaf Mobile 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 Leaf Mobile, you can compare the effects of market volatilities on Sega Sammy and Leaf Mobile 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 Leaf Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sega Sammy and Leaf Mobile.

Diversification Opportunities for Sega Sammy and Leaf Mobile

-0.33

Correlation Coefficient

Sega Sammy  Leaf Mobile

Very good diversification

The 3 months correlation between Sega and Leaf is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sega Sammy Holdings and Leaf Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leaf Mobile 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 Leaf Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leaf Mobile has no effect on the direction of Sega Sammy i.e., Sega Sammy and Leaf Mobile go up and down completely randomly.

Pair Corralation between Sega Sammy and Leaf Mobile

Assuming the 90 days horizon Sega Sammy Holdings is expected to generate 0.53 times more return on investment than Leaf Mobile. However, Sega Sammy Holdings is 1.89 times less risky than Leaf Mobile. It trades about 0.02 of its potential returns per unit of risk. Leaf Mobile is currently generating about -0.11 per unit of risk. If you would invest  489.00  in Sega Sammy Holdings on December 28, 2024 and sell it today you would earn a total of  7.00  from holding Sega Sammy Holdings or generate 1.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Sega Sammy Holdings  vs.  Leaf Mobile

Sega Sammy Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sega Sammy Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, Sega Sammy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Leaf Mobile

Risk-Adjusted Performance

Very Weak

Over the last 90 days Leaf Mobile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Sega Sammy and Leaf Mobile

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

The idea behind Sega Sammy Holdings and Leaf Mobile 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.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.