Correlation Between Casio Computer and Kingdee International
Can any of the company-specific risk be diversified away by investing in both Casio Computer and Kingdee International 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 Kingdee International 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 Kingdee International Software, you can compare the effects of market volatilities on Casio Computer and Kingdee International 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 Kingdee International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casio Computer and Kingdee International.
Diversification Opportunities for Casio Computer and Kingdee International
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Casio and Kingdee is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Casio Computer CoLtd and Kingdee International Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingdee International 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 Kingdee International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingdee International has no effect on the direction of Casio Computer i.e., Casio Computer and Kingdee International go up and down completely randomly.
Pair Corralation between Casio Computer and Kingdee International
Assuming the 90 days trading horizon Casio Computer CoLtd is expected to generate 0.42 times more return on investment than Kingdee International. However, Casio Computer CoLtd is 2.37 times less risky than Kingdee International. It trades about -0.02 of its potential returns per unit of risk. Kingdee International Software is currently generating about -0.02 per unit of risk. If you would invest 935.00 in Casio Computer CoLtd on October 14, 2024 and sell it today you would lose (168.00) from holding Casio Computer CoLtd or give up 17.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Casio Computer CoLtd vs. Kingdee International Software
Performance |
| Timeline |
| Casio Computer CoLtd |
| Kingdee International |
Casio Computer and Kingdee International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Casio Computer and Kingdee International
The main advantage of trading using opposite Casio Computer and Kingdee International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casio Computer position performs unexpectedly, Kingdee International 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 Kingdee International will offset losses from the drop in Kingdee International's long position.| Casio Computer vs. Pembina Pipeline Corp | Casio Computer vs. CANON MARKETING JP | Casio Computer vs. FLOW TRADERS LTD | Casio Computer vs. Algonquin Power Utilities |
| Kingdee International vs. National Beverage Corp | Kingdee International vs. Casio Computer CoLtd | Kingdee International vs. Hemisphere Energy Corp | Kingdee International vs. Liberty Broadband |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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