Correlation Between Nintendo and Mixi

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

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

Diversification Opportunities for Nintendo and Mixi

0.19

Correlation Coefficient

Nintendo  Mixi

Average diversification

The 3 months correlation between Nintendo and Mixi is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Nintendo Co and Mixi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mixi Inc and Nintendo 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 Nintendo Co are associated (or correlated) with Mixi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mixi Inc has no effect on the direction of Nintendo i.e., Nintendo and Mixi go up and down completely randomly.

Pair Corralation between Nintendo and Mixi

If you would invest  5,365  in Nintendo Co on September 4, 2024 and sell it today you would earn a total of  435.00  from holding Nintendo Co or generate 8.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	28.57%
Values	Daily Returns

Nintendo Co  vs.  Mixi Inc

Nintendo

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nintendo Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Nintendo may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mixi Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Nintendo and Mixi

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

The idea behind Nintendo Co and Mixi Inc 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.