Correlation Between Sunny Optical and Casio Computer
Can any of the company-specific risk be diversified away by investing in both Sunny Optical 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 Sunny Optical and Casio Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunny Optical Technology and Casio Computer CoLtd, you can compare the effects of market volatilities on Sunny Optical 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 Sunny Optical with a short position of Casio Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Casio Computer.
Diversification Opportunities for Sunny Optical and Casio Computer
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sunny and Casio is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology 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 Sunny Optical 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 Sunny Optical Technology 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 Sunny Optical i.e., Sunny Optical and Casio Computer go up and down completely randomly.
Pair Corralation between Sunny Optical and Casio Computer
Assuming the 90 days horizon Sunny Optical Technology is expected to generate 2.25 times more return on investment than Casio Computer. However, Sunny Optical is 2.25 times more volatile than Casio Computer CoLtd. It trades about 0.07 of its potential returns per unit of risk. Casio Computer CoLtd is currently generating about 0.01 per unit of risk. If you would invest 552.00 in Sunny Optical Technology on November 3, 2024 and sell it today you would earn a total of 315.00 from holding Sunny Optical Technology or generate 57.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. Casio Computer CoLtd
Performance |
| Timeline |
| Sunny Optical Technology |
| Casio Computer CoLtd |
Sunny Optical and Casio Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Casio Computer
The main advantage of trading using opposite Sunny Optical and Casio Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical 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.| Sunny Optical vs. Charter Communications | Sunny Optical vs. Cognizant Technology Solutions | Sunny Optical vs. SK TELECOM TDADR | Sunny Optical vs. X FAB Silicon Foundries |
| Casio Computer vs. Yuexiu Transport Infrastructure | Casio Computer vs. Medical Properties Trust | Casio Computer vs. Aluminum of | Casio Computer vs. Merit Medical Systems |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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