Correlation Between Tradegate and CASIO COMPUTER

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

By analyzing existing cross correlation between Tradegate AG Wertpapierhandelsbank and CASIO PUTER, you can compare the effects of market volatilities on Tradegate 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 Tradegate with a short position of CASIO COMPUTER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradegate and CASIO COMPUTER.

Diversification Opportunities for Tradegate and CASIO COMPUTER

0.03

Correlation Coefficient

Tradegate  CASIO COMPUTER

Significant diversification

The 3 months correlation between Tradegate and CASIO is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Tradegate AG Wertpapierhandels and CASIO PUTER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CASIO COMPUTER and Tradegate 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 Tradegate AG Wertpapierhandelsbank 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 Tradegate i.e., Tradegate and CASIO COMPUTER go up and down completely randomly.

Pair Corralation between Tradegate and CASIO COMPUTER

Assuming the 90 days horizon Tradegate is expected to generate 10.15 times less return on investment than CASIO COMPUTER. But when comparing it to its historical volatility, Tradegate AG Wertpapierhandelsbank is 1.6 times less risky than CASIO COMPUTER. It trades about 0.02 of its potential returns per unit of risk. CASIO PUTER is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  672.00  in CASIO PUTER on October 23, 2024 and sell it today you would earn a total of  99.00  from holding CASIO PUTER or generate 14.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Tradegate AG Wertpapierhandels  vs.  CASIO PUTER

Tradegate AG Wertpap

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tradegate AG Wertpapierhandelsbank are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Tradegate is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

CASIO COMPUTER

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CASIO PUTER are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, CASIO COMPUTER unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tradegate and CASIO COMPUTER

The main advantage of trading using opposite Tradegate and CASIO COMPUTER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradegate 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 Tradegate AG Wertpapierhandelsbank and CASIO PUTER 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.