Correlation Between Canon Marketing and EDISON INTL
Can any of the company-specific risk be diversified away by investing in both Canon Marketing and EDISON INTL 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 EDISON INTL 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 EDISON INTL, you can compare the effects of market volatilities on Canon Marketing and EDISON INTL 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 EDISON INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canon Marketing and EDISON INTL.
Diversification Opportunities for Canon Marketing and EDISON INTL
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Canon and EDISON is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Canon Marketing Japan and EDISON INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDISON INTL 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 EDISON INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDISON INTL has no effect on the direction of Canon Marketing i.e., Canon Marketing and EDISON INTL go up and down completely randomly.
Pair Corralation between Canon Marketing and EDISON INTL
Assuming the 90 days horizon Canon Marketing Japan is expected to generate 1.43 times more return on investment than EDISON INTL. However, Canon Marketing is 1.43 times more volatile than EDISON INTL. It trades about 0.06 of its potential returns per unit of risk. EDISON INTL is currently generating about 0.09 per unit of risk. If you would invest 2,440 in Canon Marketing Japan on September 14, 2024 and sell it today you would earn a total of 640.00 from holding Canon Marketing Japan or generate 26.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Canon Marketing Japan vs. EDISON INTL
Performance |
| Timeline |
| Canon Marketing Japan |
| EDISON INTL |
Canon Marketing and EDISON INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canon Marketing and EDISON INTL
The main advantage of trading using opposite Canon Marketing and EDISON INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canon Marketing position performs unexpectedly, EDISON INTL 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 EDISON INTL will offset losses from the drop in EDISON INTL's long position.| Canon Marketing vs. Canon Inc | Canon Marketing vs. Canon Inc | Canon Marketing vs. Ricoh Company | Canon Marketing vs. Herman Miller |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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