Correlation Between Capcom and BANDAI NAMCO

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

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

Diversification Opportunities for Capcom and BANDAI NAMCO

-0.44

Correlation Coefficient

Capcom  BANDAI NAMCO

Very good diversification

The 3 months correlation between Capcom and BANDAI is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Capcom Co and BANDAI NAMCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANDAI NAMCO Holdings and Capcom 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 Capcom Co are associated (or correlated) with BANDAI NAMCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANDAI NAMCO Holdings has no effect on the direction of Capcom i.e., Capcom and BANDAI NAMCO go up and down completely randomly.

Pair Corralation between Capcom and BANDAI NAMCO

Assuming the 90 days horizon Capcom Co is expected to under-perform the BANDAI NAMCO. But the pink sheet apears to be less risky and, when comparing its historical volatility, Capcom Co is 2.95 times less risky than BANDAI NAMCO. The pink sheet trades about -0.28 of its potential returns per unit of risk. The BANDAI NAMCO Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  3,409  in BANDAI NAMCO Holdings on July 1, 2025 and sell it today you would earn a total of  11.00  from holding BANDAI NAMCO Holdings or generate 0.32% return on investment over 90 days.

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

Capcom Co  vs.  BANDAI NAMCO Holdings

Capcom

Risk-Adjusted Performance

Weakest

Over the last 90 days Capcom Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in October 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

BANDAI NAMCO Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BANDAI NAMCO Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, BANDAI NAMCO is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Capcom and BANDAI NAMCO

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

The idea behind Capcom Co and BANDAI NAMCO 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.