Correlation Between Casio Computer and Globex Mining
Can any of the company-specific risk be diversified away by investing in both Casio Computer and Globex Mining 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 Globex Mining 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 Globex Mining Enterprises, you can compare the effects of market volatilities on Casio Computer and Globex Mining 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 Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casio Computer and Globex Mining.
Diversification Opportunities for Casio Computer and Globex Mining
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Casio and Globex is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Casio Computer CoLtd and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises 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 Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of Casio Computer i.e., Casio Computer and Globex Mining go up and down completely randomly.
Pair Corralation between Casio Computer and Globex Mining
Assuming the 90 days trading horizon Casio Computer is expected to generate 4.23 times less return on investment than Globex Mining. But when comparing it to its historical volatility, Casio Computer CoLtd is 1.39 times less risky than Globex Mining. It trades about 0.09 of its potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 58.00 in Globex Mining Enterprises on November 7, 2024 and sell it today you would earn a total of 44.00 from holding Globex Mining Enterprises or generate 75.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Casio Computer CoLtd vs. Globex Mining Enterprises
Performance |
| Timeline |
| Casio Computer CoLtd |
| Globex Mining Enterprises |
Casio Computer and Globex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Casio Computer and Globex Mining
The main advantage of trading using opposite Casio Computer and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casio Computer position performs unexpectedly, Globex Mining 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 Globex Mining will offset losses from the drop in Globex Mining's long position.| Casio Computer vs. The Home Depot | Casio Computer vs. Air New Zealand | Casio Computer vs. Hisense Home Appliances | Casio Computer vs. Westinghouse Air Brake |
| Globex Mining vs. China Datang | Globex Mining vs. Pure Storage | Globex Mining vs. EMBARK EDUCATION LTD | Globex Mining vs. DATANG INTL POW |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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