Correlation Between Casio Computer and Apple

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

Diversification Opportunities for Casio Computer and Apple

0.85

Correlation Coefficient

Casio Computer  Apple

Very poor diversification

The 3 months correlation between Casio and Apple is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Casio Computer CoLtd and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Casio Computer i.e., Casio Computer and Apple go up and down completely randomly.

Pair Corralation between Casio Computer and Apple

Assuming the 90 days trading horizon Casio Computer CoLtd is expected to generate 1.08 times more return on investment than Apple. However, Casio Computer is 1.08 times more volatile than Apple Inc. It trades about -0.07 of its potential returns per unit of risk. Apple Inc is currently generating about -0.46 per unit of risk. If you would invest  787.00  in Casio Computer CoLtd on October 22, 2024 and sell it today you would lose (14.00) from holding Casio Computer CoLtd or give up 1.78% of portfolio value over 90 days.

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

Casio Computer CoLtd  vs.  Apple Inc

Casio Computer CoLtd

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Casio Computer CoLtd are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Casio Computer may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Apple Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Apple is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Casio Computer and Apple

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

The idea behind Casio Computer CoLtd and Apple Inc 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.