Correlation Between Casio Computer and STMICROELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Casio Computer and STMICROELECTRONICS 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 STMICROELECTRONICS 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 STMICROELECTRONICS, you can compare the effects of market volatilities on Casio Computer and STMICROELECTRONICS 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 STMICROELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casio Computer and STMICROELECTRONICS.
Diversification Opportunities for Casio Computer and STMICROELECTRONICS
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Casio and STMICROELECTRONICS is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Casio Computer CoLtd and STMICROELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMICROELECTRONICS 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 STMICROELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STMICROELECTRONICS has no effect on the direction of Casio Computer i.e., Casio Computer and STMICROELECTRONICS go up and down completely randomly.
Pair Corralation between Casio Computer and STMICROELECTRONICS
Assuming the 90 days trading horizon Casio Computer CoLtd is expected to generate 1.07 times more return on investment than STMICROELECTRONICS. However, Casio Computer is 1.07 times more volatile than STMICROELECTRONICS. It trades about 0.39 of its potential returns per unit of risk. STMICROELECTRONICS is currently generating about 0.0 per unit of risk. If you would invest 665.00 in Casio Computer CoLtd on September 24, 2024 and sell it today you would earn a total of 120.00 from holding Casio Computer CoLtd or generate 18.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Casio Computer CoLtd vs. STMICROELECTRONICS
Performance |
| Timeline |
| Casio Computer CoLtd |
| STMICROELECTRONICS |
Casio Computer and STMICROELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Casio Computer and STMICROELECTRONICS
The main advantage of trading using opposite Casio Computer and STMICROELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casio Computer position performs unexpectedly, STMICROELECTRONICS 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 STMICROELECTRONICS will offset losses from the drop in STMICROELECTRONICS's long position.| Casio Computer vs. Ameriprise Financial | Casio Computer vs. BURLINGTON STORES | Casio Computer vs. QBE Insurance Group | Casio Computer vs. OAKTRSPECLENDNEW |
| STMICROELECTRONICS vs. 24SEVENOFFICE GROUP AB | STMICROELECTRONICS vs. Check Point Software | STMICROELECTRONICS vs. Casio Computer CoLtd | STMICROELECTRONICS vs. AECOM 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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