Correlation Between Zedge and Casio Computer

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

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

Diversification Opportunities for Zedge and Casio Computer

0.19

Correlation Coefficient

Zedge  Casio Computer

Average diversification

The 3 months correlation between Zedge and Casio is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Zedge Inc and Casio Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casio Computer and Zedge 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 Zedge Inc 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 Zedge i.e., Zedge and Casio Computer go up and down completely randomly.

Pair Corralation between Zedge and Casio Computer

Given the investment horizon of 90 days Zedge Inc is expected to generate 2.08 times more return on investment than Casio Computer. However, Zedge is 2.08 times more volatile than Casio Computer Co. It trades about 0.03 of its potential returns per unit of risk. Casio Computer Co is currently generating about 0.03 per unit of risk. If you would invest  302.00  in Zedge Inc on September 25, 2024 and sell it today you would earn a total of  13.00  from holding Zedge Inc or generate 4.3% return on investment over 90 days.

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

Zedge Inc  vs.  Casio Computer Co

Zedge Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Zedge Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent technical and fundamental indicators, Zedge may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Casio Computer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Casio Computer Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Casio Computer is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Zedge and Casio Computer

The main advantage of trading using opposite Zedge and Casio Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zedge 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 Zedge Inc 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.