Correlation Between Corsair Gaming and SEIKO EPSON

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

By analyzing existing cross correlation between Corsair Gaming and SEIKO EPSON PADR, you can compare the effects of market volatilities on Corsair Gaming and SEIKO EPSON 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 Corsair Gaming with a short position of SEIKO EPSON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corsair Gaming and SEIKO EPSON.

Diversification Opportunities for Corsair Gaming and SEIKO EPSON

-0.54

Correlation Coefficient

Corsair Gaming  SEIKO EPSON

Excellent diversification

The 3 months correlation between Corsair and SEIKO is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Corsair Gaming and SEIKO EPSON PADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEIKO EPSON PADR and Corsair Gaming 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 Corsair Gaming are associated (or correlated) with SEIKO EPSON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEIKO EPSON PADR has no effect on the direction of Corsair Gaming i.e., Corsair Gaming and SEIKO EPSON go up and down completely randomly.

Pair Corralation between Corsair Gaming and SEIKO EPSON

Assuming the 90 days horizon Corsair Gaming is expected to generate 2.27 times more return on investment than SEIKO EPSON. However, Corsair Gaming is 2.27 times more volatile than SEIKO EPSON PADR. It trades about 0.16 of its potential returns per unit of risk. SEIKO EPSON PADR is currently generating about -0.1 per unit of risk. If you would invest  620.00  in Corsair Gaming on December 30, 2024 and sell it today you would earn a total of  274.00  from holding Corsair Gaming or generate 44.19% return on investment over 90 days.

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

Corsair Gaming  vs.  SEIKO EPSON PADR

Corsair Gaming

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Corsair Gaming are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Corsair Gaming reported solid returns over the last few months and may actually be approaching a breakup point.

SEIKO EPSON PADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days SEIKO EPSON PADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Corsair Gaming and SEIKO EPSON

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

The idea behind Corsair Gaming and SEIKO EPSON PADR 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.