Correlation Between Canon Marketing and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Canon Marketing and Agilent Technologies 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 Agilent Technologies 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 Agilent Technologies, you can compare the effects of market volatilities on Canon Marketing and Agilent Technologies 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 Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canon Marketing and Agilent Technologies.
Diversification Opportunities for Canon Marketing and Agilent Technologies
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canon and Agilent is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Canon Marketing Japan and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies 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 Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of Canon Marketing i.e., Canon Marketing and Agilent Technologies go up and down completely randomly.
Pair Corralation between Canon Marketing and Agilent Technologies
Assuming the 90 days horizon Canon Marketing Japan is expected to generate 0.87 times more return on investment than Agilent Technologies. However, Canon Marketing Japan is 1.15 times less risky than Agilent Technologies. It trades about 0.05 of its potential returns per unit of risk. Agilent Technologies is currently generating about 0.0 per unit of risk. If you would invest 2,080 in Canon Marketing Japan on October 15, 2024 and sell it today you would earn a total of 900.00 from holding Canon Marketing Japan or generate 43.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canon Marketing Japan vs. Agilent Technologies
Performance |
| Timeline |
| Canon Marketing Japan |
| Agilent Technologies |
Canon Marketing and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canon Marketing and Agilent Technologies
The main advantage of trading using opposite Canon Marketing and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canon Marketing position performs unexpectedly, Agilent Technologies 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 Agilent Technologies will offset losses from the drop in Agilent Technologies' long position.| Canon Marketing vs. Retail Estates NV | Canon Marketing vs. Caseys General Stores | Canon Marketing vs. NXP Semiconductors NV | Canon Marketing vs. Hua Hong Semiconductor |
| Agilent Technologies vs. INTER CARS SA | Agilent Technologies vs. United Natural Foods | Agilent Technologies vs. CN MODERN DAIRY | Agilent Technologies vs. CarsalesCom |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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