Correlation Between Nintendo and Bellus Health

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Nintendo and Bellus Health 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 Bellus Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nintendo Ltd ADR and Bellus Health, you can compare the effects of market volatilities on Nintendo and Bellus Health 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 Bellus Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nintendo and Bellus Health.

Diversification Opportunities for Nintendo and Bellus Health

0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between Nintendo and Bellus is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nintendo Ltd ADR and Bellus Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellus Health 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 Ltd ADR are associated (or correlated) with Bellus Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellus Health has no effect on the direction of Nintendo i.e., Nintendo and Bellus Health go up and down completely randomly.

Pair Corralation between Nintendo and Bellus Health

Assuming the 90 days horizon Nintendo Ltd ADR is expected to under-perform the Bellus Health. But the otc stock apears to be less risky and, when comparing its historical volatility, Nintendo Ltd ADR is 2.73 times less risky than Bellus Health. The otc stock trades about -0.03 of its potential returns per unit of risk. The Bellus Health is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  303.00  in Bellus Health on August 28, 2022 and sell it today you would earn a total of  607.00  from holding Bellus Health or generate 200.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.79%
ValuesDaily Returns

Nintendo Ltd ADR  vs.  Bellus Health

 Performance (%) 
       Timeline  
Nintendo ADR 
Nintendo Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Nintendo Ltd ADR are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Nintendo is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Nintendo Price Channel

Bellus Health 
Bellus Performance
0 of 100
Over the last 90 days Bellus Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in December 2022. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Bellus Price Channel

Nintendo and Bellus Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nintendo and Bellus Health

The main advantage of trading using opposite Nintendo and Bellus Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nintendo position performs unexpectedly, Bellus Health 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 Bellus Health will offset losses from the drop in Bellus Health's long position.
Nintendo vs. Netease Inc ADR
Nintendo vs. Activision Blizzard
The idea behind Nintendo Ltd ADR and Bellus Health 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.
Bellus Health vs. Regeneron Pharmaceuticals
Bellus Health vs. Vertex Pharmaceutic
Check out your portfolio center. 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

Other Complementary Tools

Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go