Correlation Between Casio Computer and RETAIL FOOD
Can any of the company-specific risk be diversified away by investing in both Casio Computer and RETAIL FOOD 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 RETAIL FOOD 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 RETAIL FOOD GROUP, you can compare the effects of market volatilities on Casio Computer and RETAIL FOOD 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 RETAIL FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casio Computer and RETAIL FOOD.
Diversification Opportunities for Casio Computer and RETAIL FOOD
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Casio and RETAIL is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Casio Computer CoLtd and RETAIL FOOD GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RETAIL FOOD GROUP 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 RETAIL FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RETAIL FOOD GROUP has no effect on the direction of Casio Computer i.e., Casio Computer and RETAIL FOOD go up and down completely randomly.
Pair Corralation between Casio Computer and RETAIL FOOD
Assuming the 90 days trading horizon Casio Computer CoLtd is expected to generate 0.42 times more return on investment than RETAIL FOOD. However, Casio Computer CoLtd is 2.36 times less risky than RETAIL FOOD. It trades about -0.12 of its potential returns per unit of risk. RETAIL FOOD GROUP is currently generating about -0.3 per unit of risk. If you would invest 790.00 in Casio Computer CoLtd on October 13, 2024 and sell it today you would lose (24.00) from holding Casio Computer CoLtd or give up 3.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Casio Computer CoLtd vs. RETAIL FOOD GROUP
Performance |
| Timeline |
| Casio Computer CoLtd |
| RETAIL FOOD GROUP |
Casio Computer and RETAIL FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Casio Computer and RETAIL FOOD
The main advantage of trading using opposite Casio Computer and RETAIL FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casio Computer position performs unexpectedly, RETAIL FOOD 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 RETAIL FOOD will offset losses from the drop in RETAIL FOOD's long position.| Casio Computer vs. Kingdee International Software | Casio Computer vs. Easy Software AG | Casio Computer vs. KENEDIX OFFICE INV | Casio Computer vs. UPDATE SOFTWARE |
| RETAIL FOOD vs. Thai Beverage Public | RETAIL FOOD vs. National Beverage Corp | RETAIL FOOD vs. Casio Computer CoLtd | RETAIL FOOD vs. HEMISPHERE EGY |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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