Correlation Between Mid-Atlantic Home and Casio Computer

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

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

Diversification Opportunities for Mid-Atlantic Home and Casio Computer

0.0

Correlation Coefficient

Mid-Atlantic Home  Casio Computer

Pay attention - limited upside

The 3 months correlation between Mid-Atlantic and Casio is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mid Atlantic Home Health and Casio Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casio Computer and Mid-Atlantic Home 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 Mid Atlantic Home Health 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 has no effect on the direction of Mid-Atlantic Home i.e., Mid-Atlantic Home and Casio Computer go up and down completely randomly.

Pair Corralation between Mid-Atlantic Home and Casio Computer

Given the investment horizon of 90 days Mid Atlantic Home Health is expected to under-perform the Casio Computer. In addition to that, Mid-Atlantic Home is 1.98 times more volatile than Casio Computer Co. It trades about -0.06 of its total potential returns per unit of risk. Casio Computer Co is currently generating about 0.0 per unit of volatility. If you would invest  9,593  in Casio Computer Co on October 4, 2024 and sell it today you would lose (1,313) from holding Casio Computer Co or give up 13.69% of portfolio value over 90 days.

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

Mid Atlantic Home Health  vs.  Casio Computer Co

Mid Atlantic Home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mid Atlantic Home Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, Mid-Atlantic Home is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Casio Computer

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Casio Computer Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Mid-Atlantic Home and Casio Computer

The main advantage of trading using opposite Mid-Atlantic Home and Casio Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid-Atlantic Home 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 Mid Atlantic Home Health and Casio Computer Co 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.