Correlation Between GDEV and Capcom Co

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

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

Diversification Opportunities for GDEV and Capcom Co

-0.32

Correlation Coefficient

GDEV  Capcom Co

Very good diversification

The 3 months correlation between GDEV and Capcom is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding GDEV Inc and Capcom Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capcom Co and GDEV 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 GDEV Inc are associated (or correlated) with Capcom Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capcom Co has no effect on the direction of GDEV i.e., GDEV and Capcom Co go up and down completely randomly.

Pair Corralation between GDEV and Capcom Co

Given the investment horizon of 90 days GDEV Inc is expected to generate 3.47 times more return on investment than Capcom Co. However, GDEV is 3.47 times more volatile than Capcom Co Ltd. It trades about 0.05 of its potential returns per unit of risk. Capcom Co Ltd is currently generating about 0.06 per unit of risk. If you would invest  2,202  in GDEV Inc on September 4, 2024 and sell it today you would earn a total of  148.00  from holding GDEV Inc or generate 6.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

GDEV Inc  vs.  Capcom Co Ltd

GDEV Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GDEV Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting technical and fundamental indicators, GDEV showed solid returns over the last few months and may actually be approaching a breakup point.

Capcom Co

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Capcom Co Ltd are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Capcom Co may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with GDEV and Capcom Co

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

The idea behind GDEV Inc and Capcom Co Ltd 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.