Correlation Between Fairfax Financial and Casio Computer
Can any of the company-specific risk be diversified away by investing in both Fairfax Financial and Casio Computer 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 Fairfax Financial and Casio Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fairfax Financial Holdings and Casio Computer CoLtd, you can compare the effects of market volatilities on Fairfax Financial and Casio Computer 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 Fairfax Financial with a short position of Casio Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fairfax Financial and Casio Computer.
Diversification Opportunities for Fairfax Financial and Casio Computer
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fairfax and Casio is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Fairfax Financial Holdings and Casio Computer CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casio Computer CoLtd and Fairfax Financial 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 Fairfax Financial Holdings are associated (or correlated) with Casio Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casio Computer CoLtd has no effect on the direction of Fairfax Financial i.e., Fairfax Financial and Casio Computer go up and down completely randomly.
Pair Corralation between Fairfax Financial and Casio Computer
Assuming the 90 days horizon Fairfax Financial is expected to generate 2.21 times less return on investment than Casio Computer. But when comparing it to its historical volatility, Fairfax Financial Holdings is 1.49 times less risky than Casio Computer. It trades about 0.28 of its potential returns per unit of risk. Casio Computer CoLtd is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 655.00 in Casio Computer CoLtd on September 12, 2024 and sell it today you would earn a total of 131.00 from holding Casio Computer CoLtd or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fairfax Financial Holdings vs. Casio Computer CoLtd
Performance |
| Timeline |
| Fairfax Financial |
| Casio Computer CoLtd |
Fairfax Financial and Casio Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fairfax Financial and Casio Computer
The main advantage of trading using opposite Fairfax Financial and Casio Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fairfax Financial position performs unexpectedly, Casio Computer 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 Casio Computer will offset losses from the drop in Casio Computer's long position.| Fairfax Financial vs. MTI WIRELESS EDGE | Fairfax Financial vs. Infrastrutture Wireless Italiane | Fairfax Financial vs. Iridium Communications | Fairfax Financial vs. Entravision Communications |
| Casio Computer vs. Samsung Electronics Co | Casio Computer vs. Samsung Electronics Co | Casio Computer vs. Sony Group | Casio Computer vs. Superior Plus Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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