Correlation Between Square Enix and I3 Interactive

Can any of the company-specific risk be diversified away by investing in both Square Enix and I3 Interactive 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 I3 Interactive 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 i3 Interactive, you can compare the effects of market volatilities on Square Enix and I3 Interactive 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 I3 Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Square Enix and I3 Interactive.

Diversification Opportunities for Square Enix and I3 Interactive

0.0

Correlation Coefficient

Square Enix  I3 Interactive

Pay attention - limited upside

The 3 months correlation between Square and BLITF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Square Enix Holdings and i3 Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on i3 Interactive 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 I3 Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of i3 Interactive has no effect on the direction of Square Enix i.e., Square Enix and I3 Interactive go up and down completely randomly.

Pair Corralation between Square Enix and I3 Interactive

If you would invest  4,080  in Square Enix Holdings on December 29, 2024 and sell it today you would earn a total of  533.00  from holding Square Enix Holdings or generate 13.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

Square Enix Holdings  vs.  i3 Interactive

Square Enix Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Square Enix Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Square Enix reported solid returns over the last few months and may actually be approaching a breakup point.

i3 Interactive

Risk-Adjusted Performance

Very Weak

Over the last 90 days i3 Interactive has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, I3 Interactive is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Square Enix and I3 Interactive

The main advantage of trading using opposite Square Enix and I3 Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Square Enix position performs unexpectedly, I3 Interactive 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 I3 Interactive will offset losses from the drop in I3 Interactive's long position.

The idea behind Square Enix Holdings and i3 Interactive 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..