Correlation Between I3 Interactive and Nintendo

Can any of the company-specific risk be diversified away by investing in both I3 Interactive and Nintendo 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 I3 Interactive and Nintendo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between i3 Interactive and Nintendo Co ADR, you can compare the effects of market volatilities on I3 Interactive and Nintendo 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 I3 Interactive with a short position of Nintendo. Check out your portfolio center. Please also check ongoing floating volatility patterns of I3 Interactive and Nintendo.

Diversification Opportunities for I3 Interactive and Nintendo

0.0

Correlation Coefficient

I3 Interactive  Nintendo

Pay attention - limited upside

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

Pair Corralation between I3 Interactive and Nintendo

If you would invest  1,330  in Nintendo Co ADR on September 3, 2024 and sell it today you would earn a total of  135.00  from holding Nintendo Co ADR or generate 10.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

i3 Interactive  vs.  Nintendo Co ADR

i3 Interactive

Risk-Adjusted Performance

0 of 100

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.

Nintendo Co ADR

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nintendo Co ADR are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Nintendo may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with I3 Interactive and Nintendo

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

The idea behind i3 Interactive and Nintendo Co ADR 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.