Correlation Between Casio Computer and Amexdrug

Can any of the company-specific risk be diversified away by investing in both Casio Computer and Amexdrug 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 Amexdrug into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Casio Computer Co and Amexdrug, you can compare the effects of market volatilities on Casio Computer and Amexdrug 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 Amexdrug. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casio Computer and Amexdrug.

Diversification Opportunities for Casio Computer and Amexdrug

0.0

Correlation Coefficient

Casio Computer  Amexdrug

Pay attention - limited upside

The 3 months correlation between Casio and Amexdrug is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Casio Computer Co and Amexdrug in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amexdrug 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 Co are associated (or correlated) with Amexdrug. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amexdrug has no effect on the direction of Casio Computer i.e., Casio Computer and Amexdrug go up and down completely randomly.

Pair Corralation between Casio Computer and Amexdrug

Assuming the 90 days horizon Casio Computer Co is expected to generate 6.86 times more return on investment than Amexdrug. However, Casio Computer is 6.86 times more volatile than Amexdrug. It trades about 0.04 of its potential returns per unit of risk. Amexdrug is currently generating about -0.08 per unit of risk. If you would invest  7,707  in Casio Computer Co on September 13, 2024 and sell it today you would earn a total of  713.00  from holding Casio Computer Co or generate 9.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Casio Computer Co  vs.  Amexdrug

Casio Computer

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Casio Computer Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Casio Computer may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Amexdrug

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amexdrug has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Amexdrug is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Casio Computer and Amexdrug

The main advantage of trading using opposite Casio Computer and Amexdrug positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casio Computer position performs unexpectedly, Amexdrug 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 Amexdrug will offset losses from the drop in Amexdrug's long position.

The idea behind Casio Computer Co and Amexdrug pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.