Correlation Between Casio Computer and Griffon

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Can any of the company-specific risk be diversified away by investing in both Casio Computer and Griffon 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 Griffon 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 Griffon, you can compare the effects of market volatilities on Casio Computer and Griffon 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 Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casio Computer and Griffon.

Diversification Opportunities for Casio Computer and Griffon

0.23
  Correlation Coefficient

Modest diversification

The 3 months correlation between Casio and Griffon is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Casio Computer CoLtd and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon 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 Griffon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffon has no effect on the direction of Casio Computer i.e., Casio Computer and Griffon go up and down completely randomly.

Pair Corralation between Casio Computer and Griffon

Assuming the 90 days trading horizon Casio Computer CoLtd is expected to generate 0.96 times more return on investment than Griffon. However, Casio Computer CoLtd is 1.04 times less risky than Griffon. It trades about 0.42 of its potential returns per unit of risk. Griffon is currently generating about 0.12 per unit of risk. If you would invest  668.00  in Casio Computer CoLtd on September 19, 2024 and sell it today you would earn a total of  134.00  from holding Casio Computer CoLtd or generate 20.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.65%
ValuesDaily Returns

Casio Computer CoLtd  vs.  Griffon

 Performance 
       Timeline  
Casio Computer CoLtd 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Casio Computer CoLtd are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Casio Computer may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Griffon 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Griffon are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Griffon reported solid returns over the last few months and may actually be approaching a breakup point.

Casio Computer and Griffon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Casio Computer and Griffon

The main advantage of trading using opposite Casio Computer and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casio Computer position performs unexpectedly, Griffon 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 Griffon will offset losses from the drop in Griffon's long position.
The idea behind Casio Computer CoLtd and Griffon pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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