Correlation Between Kyocera and Casio Computer

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

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

Diversification Opportunities for Kyocera and Casio Computer

0.66

Correlation Coefficient

Kyocera  Casio Computer

Poor diversification

The 3 months correlation between Kyocera and Casio is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Kyocera 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 Kyocera 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 Kyocera 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 Kyocera i.e., Kyocera and Casio Computer go up and down completely randomly.

Pair Corralation between Kyocera and Casio Computer

If you would invest  821.00  in Casio Computer CoLtd on September 19, 2024 and sell it today you would earn a total of  0.00  from holding Casio Computer CoLtd or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Kyocera  vs.  Casio Computer CoLtd

Kyocera

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kyocera has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Casio Computer CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Casio Computer CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Casio Computer is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kyocera and Casio Computer

The main advantage of trading using opposite Kyocera and Casio Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyocera 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.

The idea behind Kyocera and Casio Computer CoLtd 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.