Correlation Between LIFENET INSURANCE and Canon
Can any of the company-specific risk be diversified away by investing in both LIFENET INSURANCE and Canon 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 LIFENET INSURANCE and Canon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFENET INSURANCE CO and Canon Inc, you can compare the effects of market volatilities on LIFENET INSURANCE and Canon 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 LIFENET INSURANCE with a short position of Canon. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFENET INSURANCE and Canon.
Diversification Opportunities for LIFENET INSURANCE and Canon
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LIFENET and Canon is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO and Canon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Inc and LIFENET INSURANCE 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 LIFENET INSURANCE CO are associated (or correlated) with Canon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Inc has no effect on the direction of LIFENET INSURANCE i.e., LIFENET INSURANCE and Canon go up and down completely randomly.
Pair Corralation between LIFENET INSURANCE and Canon
Assuming the 90 days horizon LIFENET INSURANCE CO is expected to generate 1.39 times more return on investment than Canon. However, LIFENET INSURANCE is 1.39 times more volatile than Canon Inc. It trades about 0.08 of its potential returns per unit of risk. Canon Inc is currently generating about 0.05 per unit of risk. If you would invest 650.00 in LIFENET INSURANCE CO on August 31, 2024 and sell it today you would earn a total of 580.00 from holding LIFENET INSURANCE CO or generate 89.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFENET INSURANCE CO vs. Canon Inc
Performance |
| Timeline |
| LIFENET INSURANCE |
| Canon Inc |
LIFENET INSURANCE and Canon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFENET INSURANCE and Canon
The main advantage of trading using opposite LIFENET INSURANCE and Canon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFENET INSURANCE position performs unexpectedly, Canon 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 Canon will offset losses from the drop in Canon's long position.| LIFENET INSURANCE vs. ONWARD MEDICAL BV | LIFENET INSURANCE vs. CHINA TONTINE WINES | LIFENET INSURANCE vs. ITALIAN WINE BRANDS | LIFENET INSURANCE vs. MELIA HOTELS |
| Canon vs. Summit Materials | Canon vs. THRACE PLASTICS | Canon vs. CarsalesCom | Canon vs. Compagnie Plastic Omnium |
Check out your portfolio center.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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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