Correlation Between Nintendo and QINGCI GAMES

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

By analyzing existing cross correlation between Nintendo Co and QINGCI GAMES INC, you can compare the effects of market volatilities on Nintendo and QINGCI GAMES 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 QINGCI GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nintendo and QINGCI GAMES.

Diversification Opportunities for Nintendo and QINGCI GAMES

0.22

Correlation Coefficient

Nintendo  QINGCI GAMES

Modest diversification

The 3 months correlation between Nintendo and QINGCI is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nintendo Co and QINGCI GAMES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QINGCI GAMES 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 QINGCI GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QINGCI GAMES INC has no effect on the direction of Nintendo i.e., Nintendo and QINGCI GAMES go up and down completely randomly.

Pair Corralation between Nintendo and QINGCI GAMES

Assuming the 90 days trading horizon Nintendo Co is expected to generate 1.05 times more return on investment than QINGCI GAMES. However, Nintendo is 1.05 times more volatile than QINGCI GAMES INC. It trades about 0.1 of its potential returns per unit of risk. QINGCI GAMES INC is currently generating about 0.01 per unit of risk. If you would invest  1,190  in Nintendo Co on September 5, 2024 and sell it today you would earn a total of  220.00  from holding Nintendo Co or generate 18.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Nintendo Co  vs.  QINGCI GAMES INC

Nintendo

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nintendo Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nintendo reported solid returns over the last few months and may actually be approaching a breakup point.

QINGCI GAMES INC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in QINGCI GAMES INC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, QINGCI GAMES 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 QINGCI GAMES

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

The idea behind Nintendo Co and QINGCI GAMES 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 Global Correlations module to find global opportunities by holding instruments from different markets.