Correlation Between Nintendo and PLAYTIKA HOLDING

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Can any of the company-specific risk be diversified away by investing in both Nintendo and PLAYTIKA HOLDING 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 PLAYTIKA HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nintendo Co and PLAYTIKA HOLDING DL 01, you can compare the effects of market volatilities on Nintendo and PLAYTIKA HOLDING 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 PLAYTIKA HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nintendo and PLAYTIKA HOLDING.

Diversification Opportunities for Nintendo and PLAYTIKA HOLDING

-0.25
  Correlation Coefficient

Very good diversification

The 3 months correlation between Nintendo and PLAYTIKA is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nintendo Co and PLAYTIKA HOLDING DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTIKA HOLDING 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 PLAYTIKA HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYTIKA HOLDING has no effect on the direction of Nintendo i.e., Nintendo and PLAYTIKA HOLDING go up and down completely randomly.

Pair Corralation between Nintendo and PLAYTIKA HOLDING

Assuming the 90 days horizon Nintendo Co is expected to generate 0.91 times more return on investment than PLAYTIKA HOLDING. However, Nintendo Co is 1.1 times less risky than PLAYTIKA HOLDING. It trades about 0.13 of its potential returns per unit of risk. PLAYTIKA HOLDING DL 01 is currently generating about -0.04 per unit of risk. If you would invest  6,388  in Nintendo Co on April 20, 2025 and sell it today you would earn a total of  1,172  from holding Nintendo Co or generate 18.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Nintendo Co  vs.  PLAYTIKA HOLDING DL 01

 Performance 
       Timeline  
Nintendo 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Nintendo Co are ranked lower than 10 (%) 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.
PLAYTIKA HOLDING 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days PLAYTIKA HOLDING DL 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PLAYTIKA HOLDING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Nintendo and PLAYTIKA HOLDING Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nintendo and PLAYTIKA HOLDING

The main advantage of trading using opposite Nintendo and PLAYTIKA HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nintendo position performs unexpectedly, PLAYTIKA HOLDING 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 PLAYTIKA HOLDING will offset losses from the drop in PLAYTIKA HOLDING's long position.
The idea behind Nintendo Co and PLAYTIKA HOLDING DL 01 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.

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