Correlation Between Golden Matrix and Square Enix

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

By analyzing existing cross correlation between Golden Matrix Group and Square Enix Holdings, you can compare the effects of market volatilities on Golden Matrix 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 Golden Matrix with a short position of Square Enix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Matrix and Square Enix.

Diversification Opportunities for Golden Matrix and Square Enix

-0.18

Correlation Coefficient

Golden Matrix  Square Enix

Good diversification

The 3 months correlation between Golden and Square is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Golden Matrix Group 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 Golden Matrix 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 Golden Matrix Group 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 Golden Matrix i.e., Golden Matrix and Square Enix go up and down completely randomly.

Pair Corralation between Golden Matrix and Square Enix

Given the investment horizon of 90 days Golden Matrix Group is expected to under-perform the Square Enix. In addition to that, Golden Matrix is 1.65 times more volatile than Square Enix Holdings. It trades about -0.02 of its total potential returns per unit of risk. Square Enix Holdings is currently generating about -0.02 per unit of volatility. If you would invest  1,951  in Square Enix Holdings on September 12, 2024 and sell it today you would lose (121.00) from holding Square Enix Holdings or give up 6.2% of portfolio value over 90 days.

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

Golden Matrix Group  vs.  Square Enix Holdings

Golden Matrix Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Matrix Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Golden Matrix is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Square Enix Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Square Enix Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Square Enix is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Golden Matrix and Square Enix

The main advantage of trading using opposite Golden Matrix and Square Enix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Matrix 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 Golden Matrix Group 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.