Correlation Between Casio Computer and Haier Smart
Can any of the company-specific risk be diversified away by investing in both Casio Computer and Haier Smart 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 Casio Computer and Haier Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Casio Computer CoLtd and Haier Smart Home, you can compare the effects of market volatilities on Casio Computer and Haier Smart 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 Casio Computer with a short position of Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casio Computer and Haier Smart.
Diversification Opportunities for Casio Computer and Haier Smart
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Casio and Haier is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Casio Computer CoLtd and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home and Casio Computer 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 Casio Computer CoLtd are associated (or correlated) with Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of Casio Computer i.e., Casio Computer and Haier Smart go up and down completely randomly.
Pair Corralation between Casio Computer and Haier Smart
Assuming the 90 days trading horizon Casio Computer CoLtd is expected to under-perform the Haier Smart. But the stock apears to be less risky and, when comparing its historical volatility, Casio Computer CoLtd is 1.16 times less risky than Haier Smart. The stock trades about -0.01 of its potential returns per unit of risk. The Haier Smart Home is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 105.00 in Haier Smart Home on December 13, 2024 and sell it today you would earn a total of 82.00 from holding Haier Smart Home or generate 78.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Casio Computer CoLtd vs. Haier Smart Home
Performance |
| Timeline |
| Casio Computer CoLtd |
| Haier Smart Home |
Casio Computer and Haier Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Casio Computer and Haier Smart
The main advantage of trading using opposite Casio Computer and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casio Computer position performs unexpectedly, Haier Smart 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 Haier Smart will offset losses from the drop in Haier Smart's long position.| Casio Computer vs. COVIVIO HOTELS INH | ||
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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 the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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