Correlation Between Casio Computer and Seiko Epson

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

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

Diversification Opportunities for Casio Computer and Seiko Epson

0.74

Correlation Coefficient

Casio Computer  Seiko Epson

Poor diversification

The 3 months correlation between Casio and Seiko is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Casio Computer Co and Seiko Epson Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seiko Epson Corp 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 Co 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 Corp has no effect on the direction of Casio Computer i.e., Casio Computer and Seiko Epson go up and down completely randomly.

Pair Corralation between Casio Computer and Seiko Epson

Assuming the 90 days horizon Casio Computer Co is expected to under-perform the Seiko Epson. In addition to that, Casio Computer is 1.34 times more volatile than Seiko Epson Corp. It trades about -0.13 of its total potential returns per unit of risk. Seiko Epson Corp is currently generating about -0.15 per unit of volatility. If you would invest  651.00  in Seiko Epson Corp on July 13, 2025 and sell it today you would lose (40.00) from holding Seiko Epson Corp or give up 6.14% of portfolio value over 90 days.

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

Casio Computer Co  vs.  Seiko Epson Corp

Casio Computer

Risk-Adjusted Performance

Weakest

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.

Seiko Epson Corp

Risk-Adjusted Performance

Weakest

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

Pair Trading with Casio Computer and Seiko Epson

The main advantage of trading using opposite Casio Computer and Seiko Epson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casio Computer 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 Casio Computer Co and Seiko Epson Corp 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .