Regarding recent stock market trends, we have gained many valuable insights through our ongoing dialogues with investors.
Concerning the movements in our company’s stock price, while acknowledging both firm-specific and macroeconomic factors, we recognize that our primary focus must remain on internal execution and delivering results.
With this in mind, we have also received insightful commentary regarding the impact of the current macroeconomic environment; while this is just one perspective, we would like to share it with you.
- Shorting high-beta stocks as part of a market-neutral strategy
Through our ongoing dialogues with investors, we have received feedback that in the current market environment, there is a notable adoption of so-called market-neutral strategies. This involves adjusting exposure by combining long positions in global AI-related stocks with short positions in other growth stocks that exhibit high correlations in risk and growth characteristics.
We have been informed that, given the tendency for AI-related stocks to exhibit high volatility, high-beta stocks are sometimes selected as a basket for the short side of these trades.
In this context, it has been suggested that our stock, which carries a relatively high beta, may also be included as a pair for risk adjustment purposes.
- Selling points of the entertainment sector in the context of “AI substitutability”
Furthermore, there was an opinion that when increasing “long” positions in AI-related sectors, it is necessary to execute “short” positions in other sectors from a risk-adjustment perspective, and that in doing so, sectors with the potential for AI substitutability are selected.
In this context, some investors hold the view that stocks susceptible to being replaced by AI – led by entertainment and gaming – are sometimes targeted as part of a pair trade for risk adjustment.
Additionally, it has been pointed out that concerns about the entertainment sector being replaced by AI are influencing sector selection, leading to scenarios where entertainment-related stocks are collectively targeted for short-selling.