Correlation Between CDN IMPERIAL and Canon Marketing
Can any of the company-specific risk be diversified away by investing in both CDN IMPERIAL and Canon Marketing 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 CDN IMPERIAL and Canon Marketing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDN IMPERIAL BANK and Canon Marketing Japan, you can compare the effects of market volatilities on CDN IMPERIAL and Canon Marketing 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 CDN IMPERIAL with a short position of Canon Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN IMPERIAL and Canon Marketing.
Diversification Opportunities for CDN IMPERIAL and Canon Marketing
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CDN and Canon is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding CDN IMPERIAL BANK and Canon Marketing Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Marketing Japan and CDN IMPERIAL 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 CDN IMPERIAL BANK are associated (or correlated) with Canon Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Marketing Japan has no effect on the direction of CDN IMPERIAL i.e., CDN IMPERIAL and Canon Marketing go up and down completely randomly.
Pair Corralation between CDN IMPERIAL and Canon Marketing
Assuming the 90 days trading horizon CDN IMPERIAL BANK is expected to generate 0.61 times more return on investment than Canon Marketing. However, CDN IMPERIAL BANK is 1.63 times less risky than Canon Marketing. It trades about 0.24 of its potential returns per unit of risk. Canon Marketing Japan is currently generating about 0.07 per unit of risk. If you would invest 4,190 in CDN IMPERIAL BANK on October 13, 2024 and sell it today you would earn a total of 1,900 from holding CDN IMPERIAL BANK or generate 45.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDN IMPERIAL BANK vs. Canon Marketing Japan
Performance |
| Timeline |
| CDN IMPERIAL BANK |
| Canon Marketing Japan |
CDN IMPERIAL and Canon Marketing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN IMPERIAL and Canon Marketing
The main advantage of trading using opposite CDN IMPERIAL and Canon Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN IMPERIAL position performs unexpectedly, Canon Marketing 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 Marketing will offset losses from the drop in Canon Marketing's long position.| CDN IMPERIAL vs. KENEDIX OFFICE INV | CDN IMPERIAL vs. OFFICE DEPOT | CDN IMPERIAL vs. alstria office REIT AG | CDN IMPERIAL vs. Focus Home Interactive |
| Canon Marketing vs. Columbia Sportswear | Canon Marketing vs. Southwest Airlines Co | Canon Marketing vs. China Eastern Airlines | Canon Marketing vs. Gol Intelligent Airlines |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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