Correlation Between Casio Computer and British American
Can any of the company-specific risk be diversified away by investing in both Casio Computer and British American 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 British American 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 British American Tobacco, you can compare the effects of market volatilities on Casio Computer and British American 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 British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casio Computer and British American.
Diversification Opportunities for Casio Computer and British American
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Casio and British is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Casio Computer CoLtd and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco 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 British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of Casio Computer i.e., Casio Computer and British American go up and down completely randomly.
Pair Corralation between Casio Computer and British American
Assuming the 90 days trading horizon Casio Computer CoLtd is expected to under-perform the British American. In addition to that, Casio Computer is 1.93 times more volatile than British American Tobacco. It trades about -0.07 of its total potential returns per unit of risk. British American Tobacco is currently generating about 0.04 per unit of volatility. If you would invest 3,538 in British American Tobacco on October 10, 2024 and sell it today you would earn a total of 19.00 from holding British American Tobacco or generate 0.54% 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. British American Tobacco
Performance |
| Timeline |
| Casio Computer CoLtd |
| British American Tobacco |
Casio Computer and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Casio Computer and British American
The main advantage of trading using opposite Casio Computer and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casio Computer position performs unexpectedly, British American 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 British American will offset losses from the drop in British American's long position.| Casio Computer vs. HANOVER INSURANCE | Casio Computer vs. QBE Insurance Group | Casio Computer vs. ZURICH INSURANCE GROUP | Casio Computer vs. SBI Insurance Group |
| British American vs. Singapore Telecommunications Limited | British American vs. Grand Canyon Education | British American vs. ecotel communication ag | British American vs. Laureate Education |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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