Correlation Between Casio Computer and Solidion Technology

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

Diversification Opportunities for Casio Computer and Solidion Technology

-0.25

Correlation Coefficient

Casio Computer  Solidion Technology

Very good diversification

The 3 months correlation between Casio and Solidion is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Casio Computer Co and Solidion Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solidion Technology 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 Solidion Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solidion Technology has no effect on the direction of Casio Computer i.e., Casio Computer and Solidion Technology go up and down completely randomly.

Pair Corralation between Casio Computer and Solidion Technology

Assuming the 90 days horizon Casio Computer Co is expected to generate 0.2 times more return on investment than Solidion Technology. However, Casio Computer Co is 5.12 times less risky than Solidion Technology. It trades about 0.01 of its potential returns per unit of risk. Solidion Technology is currently generating about -0.01 per unit of risk. If you would invest  8,239  in Casio Computer Co on September 26, 2024 and sell it today you would lose (359.00) from holding Casio Computer Co or give up 4.36% of portfolio value over 90 days.

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

Casio Computer Co  vs.  Solidion Technology

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 current stock price disturbance, may contribute to short-term losses for the investors.

Solidion Technology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Solidion Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Solidion Technology demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Casio Computer and Solidion Technology

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

The idea behind Casio Computer Co and Solidion Technology 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 Stocks Directory module to find actively traded stocks across global markets.