Correlation Between Casio Computer and ITOCHU
Can any of the company-specific risk be diversified away by investing in both Casio Computer and ITOCHU 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 ITOCHU 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 ITOCHU, you can compare the effects of market volatilities on Casio Computer and ITOCHU 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 ITOCHU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casio Computer and ITOCHU.
Diversification Opportunities for Casio Computer and ITOCHU
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Casio and ITOCHU is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Casio Computer CoLtd and ITOCHU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITOCHU 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 ITOCHU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITOCHU has no effect on the direction of Casio Computer i.e., Casio Computer and ITOCHU go up and down completely randomly.
Pair Corralation between Casio Computer and ITOCHU
Assuming the 90 days trading horizon Casio Computer CoLtd is expected to generate 0.98 times more return on investment than ITOCHU. However, Casio Computer CoLtd is 1.03 times less risky than ITOCHU. It trades about -0.1 of its potential returns per unit of risk. ITOCHU is currently generating about -0.49 per unit of risk. If you would invest 803.00 in Casio Computer CoLtd on October 25, 2024 and sell it today you would lose (19.00) from holding Casio Computer CoLtd or give up 2.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Casio Computer CoLtd vs. ITOCHU
Performance |
| Timeline |
| Casio Computer CoLtd |
| ITOCHU |
Casio Computer and ITOCHU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Casio Computer and ITOCHU
The main advantage of trading using opposite Casio Computer and ITOCHU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casio Computer position performs unexpectedly, ITOCHU 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 ITOCHU will offset losses from the drop in ITOCHU's long position.| Casio Computer vs. CHRYSALIS INVESTMENTS LTD | Casio Computer vs. Entravision Communications | Casio Computer vs. FIRST SAVINGS FINL | Casio Computer vs. HUTCHISON TELECOMM |
| ITOCHU vs. SIEM OFFSHORE NEW | ITOCHU vs. DXC Technology Co | ITOCHU vs. Entravision Communications | ITOCHU vs. SCOTT TECHNOLOGY |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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