Correlation Between Casio Computer and Natures Miracle

Can any of the company-specific risk be diversified away by investing in both Casio Computer and Natures Miracle 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 Natures Miracle 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 Natures Miracle Holding, you can compare the effects of market volatilities on Casio Computer and Natures Miracle 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 Natures Miracle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casio Computer and Natures Miracle.

Diversification Opportunities for Casio Computer and Natures Miracle

0.49

Correlation Coefficient

Casio Computer  Natures Miracle

Very weak diversification

The 3 months correlation between Casio and Natures is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Casio Computer Co and Natures Miracle Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natures Miracle Holding 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 Natures Miracle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natures Miracle Holding has no effect on the direction of Casio Computer i.e., Casio Computer and Natures Miracle go up and down completely randomly.

Pair Corralation between Casio Computer and Natures Miracle

Assuming the 90 days horizon Casio Computer Co is expected to under-perform the Natures Miracle. But the pink sheet apears to be less risky and, when comparing its historical volatility, Casio Computer Co is 14.89 times less risky than Natures Miracle. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Natures Miracle Holding is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1.69  in Natures Miracle Holding on September 12, 2024 and sell it today you would lose (0.59) from holding Natures Miracle Holding or give up 34.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	55.56%
Values	Daily Returns

Casio Computer Co  vs.  Natures Miracle Holding

Casio Computer

Risk-Adjusted Performance

0 of 100

Very Weak

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

Natures Miracle Holding

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Natures Miracle Holding are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady forward indicators, Natures Miracle showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Casio Computer and Natures Miracle

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

The idea behind Casio Computer Co and Natures Miracle Holding 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.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.