Correlation Between Casio Computer and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both Casio Computer and Singapore Airlines 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 Singapore Airlines 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 Singapore Airlines Limited, you can compare the effects of market volatilities on Casio Computer and Singapore Airlines 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 Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casio Computer and Singapore Airlines.
Diversification Opportunities for Casio Computer and Singapore Airlines
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Casio and Singapore is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Casio Computer CoLtd and Singapore Airlines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines 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 Singapore Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Airlines has no effect on the direction of Casio Computer i.e., Casio Computer and Singapore Airlines go up and down completely randomly.
Pair Corralation between Casio Computer and Singapore Airlines
Assuming the 90 days trading horizon Casio Computer CoLtd is expected to generate 1.09 times more return on investment than Singapore Airlines. However, Casio Computer is 1.09 times more volatile than Singapore Airlines Limited. It trades about 0.08 of its potential returns per unit of risk. Singapore Airlines Limited is currently generating about 0.04 per unit of risk. If you would invest 690.00 in Casio Computer CoLtd on September 26, 2024 and sell it today you would earn a total of 97.00 from holding Casio Computer CoLtd or generate 14.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Casio Computer CoLtd vs. Singapore Airlines Limited
Performance |
Timeline |
Casio Computer CoLtd |
Singapore Airlines |
Casio Computer and Singapore Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Casio Computer and Singapore Airlines
The main advantage of trading using opposite Casio Computer and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casio Computer position performs unexpectedly, Singapore Airlines 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 Singapore Airlines will offset losses from the drop in Singapore Airlines' long position.Casio Computer vs. Chuangs China Investments | Casio Computer vs. REGAL ASIAN INVESTMENTS | Casio Computer vs. Virtus Investment Partners | Casio Computer vs. Zijin Mining Group |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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