Correlation Between Canon Marketing and Zhongsheng Group
Can any of the company-specific risk be diversified away by investing in both Canon Marketing and Zhongsheng Group 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 Canon Marketing and Zhongsheng Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canon Marketing Japan and Zhongsheng Group Holdings, you can compare the effects of market volatilities on Canon Marketing and Zhongsheng Group 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 Canon Marketing with a short position of Zhongsheng Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canon Marketing and Zhongsheng Group.
Diversification Opportunities for Canon Marketing and Zhongsheng Group
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canon and Zhongsheng is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Canon Marketing Japan and Zhongsheng Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongsheng Group Holdings and Canon Marketing 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 Canon Marketing Japan are associated (or correlated) with Zhongsheng Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongsheng Group Holdings has no effect on the direction of Canon Marketing i.e., Canon Marketing and Zhongsheng Group go up and down completely randomly.
Pair Corralation between Canon Marketing and Zhongsheng Group
Assuming the 90 days horizon Canon Marketing Japan is expected to generate 0.54 times more return on investment than Zhongsheng Group. However, Canon Marketing Japan is 1.84 times less risky than Zhongsheng Group. It trades about -0.05 of its potential returns per unit of risk. Zhongsheng Group Holdings is currently generating about -0.67 per unit of risk. If you would invest 3,080 in Canon Marketing Japan on October 12, 2024 and sell it today you would lose (40.00) from holding Canon Marketing Japan or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canon Marketing Japan vs. Zhongsheng Group Holdings
Performance |
| Timeline |
| Canon Marketing Japan |
| Zhongsheng Group Holdings |
Canon Marketing and Zhongsheng Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canon Marketing and Zhongsheng Group
The main advantage of trading using opposite Canon Marketing and Zhongsheng Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canon Marketing position performs unexpectedly, Zhongsheng Group 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 Zhongsheng Group will offset losses from the drop in Zhongsheng Group's long position.| Canon Marketing vs. Columbia Sportswear | Canon Marketing vs. Southwest Airlines Co | Canon Marketing vs. China Eastern Airlines | Canon Marketing vs. Gol Intelligent Airlines |
| Zhongsheng Group vs. Canon Marketing Japan | Zhongsheng Group vs. The Boston Beer | Zhongsheng Group vs. Auto Trader Group | Zhongsheng Group vs. China Resources Beer |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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