Correlation Between Casio Computer and EMERSON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both Casio Computer and EMERSON ELECTRIC 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 EMERSON ELECTRIC 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 EMERSON ELECTRIC, you can compare the effects of market volatilities on Casio Computer and EMERSON ELECTRIC 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 EMERSON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casio Computer and EMERSON ELECTRIC.
Diversification Opportunities for Casio Computer and EMERSON ELECTRIC
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Casio and EMERSON is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Casio Computer CoLtd and EMERSON ELECTRIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMERSON ELECTRIC 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 EMERSON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMERSON ELECTRIC has no effect on the direction of Casio Computer i.e., Casio Computer and EMERSON ELECTRIC go up and down completely randomly.
Pair Corralation between Casio Computer and EMERSON ELECTRIC
Assuming the 90 days trading horizon Casio Computer CoLtd is expected to generate 1.52 times more return on investment than EMERSON ELECTRIC. However, Casio Computer is 1.52 times more volatile than EMERSON ELECTRIC. It trades about -0.05 of its potential returns per unit of risk. EMERSON ELECTRIC is currently generating about -0.37 per unit of risk. If you would invest 779.00 in Casio Computer CoLtd on October 12, 2024 and sell it today you would lose (11.00) from holding Casio Computer CoLtd or give up 1.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Casio Computer CoLtd vs. EMERSON ELECTRIC
Performance |
| Timeline |
| Casio Computer CoLtd |
| EMERSON ELECTRIC |
Casio Computer and EMERSON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Casio Computer and EMERSON ELECTRIC
The main advantage of trading using opposite Casio Computer and EMERSON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casio Computer position performs unexpectedly, EMERSON ELECTRIC 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 EMERSON ELECTRIC will offset losses from the drop in EMERSON ELECTRIC's long position.| Casio Computer vs. ARROW ELECTRONICS | Casio Computer vs. STRAYER EDUCATION | Casio Computer vs. Renesas Electronics | Casio Computer vs. Grand Canyon Education |
| EMERSON ELECTRIC vs. Siamgas And Petrochemicals | EMERSON ELECTRIC vs. Sekisui Chemical Co | EMERSON ELECTRIC vs. Kingdee International Software | EMERSON ELECTRIC vs. Casio Computer CoLtd |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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