Correlation Between I3 Interactive and Square Enix

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

By analyzing existing cross correlation between i3 Interactive and Square Enix Holdings, you can compare the effects of market volatilities on I3 Interactive and Square Enix 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 Square Enix. Check out your portfolio center. Please also check ongoing floating volatility patterns of I3 Interactive and Square Enix.

Diversification Opportunities for I3 Interactive and Square Enix

0.0

Correlation Coefficient

I3 Interactive  Square Enix

Pay attention - limited upside

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

Pair Corralation between I3 Interactive and Square Enix

If you would invest  3,480  in Square Enix Holdings on September 3, 2024 and sell it today you would earn a total of  380.00  from holding Square Enix Holdings or generate 10.92% return on investment over 90 days.

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

i3 Interactive  vs.  Square Enix Holdings

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.

Square Enix Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Square Enix Holdings are ranked lower than 4 (%) 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.

Pair Trading with I3 Interactive and Square Enix

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

The idea behind i3 Interactive and Square Enix Holdings 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.