Correlation Between Canon Marketing and FirstGroup Plc
Can any of the company-specific risk be diversified away by investing in both Canon Marketing and FirstGroup Plc 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 FirstGroup Plc 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 FirstGroup plc, you can compare the effects of market volatilities on Canon Marketing and FirstGroup Plc 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 FirstGroup Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canon Marketing and FirstGroup Plc.
Diversification Opportunities for Canon Marketing and FirstGroup Plc
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Canon and FirstGroup is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Canon Marketing Japan and FirstGroup plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstGroup plc 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 FirstGroup Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstGroup plc has no effect on the direction of Canon Marketing i.e., Canon Marketing and FirstGroup Plc go up and down completely randomly.
Pair Corralation between Canon Marketing and FirstGroup Plc
Assuming the 90 days horizon Canon Marketing Japan is expected to generate 0.91 times more return on investment than FirstGroup Plc. However, Canon Marketing Japan is 1.09 times less risky than FirstGroup Plc. It trades about 0.05 of its potential returns per unit of risk. FirstGroup plc is currently generating about 0.01 per unit of risk. If you would invest 2,640 in Canon Marketing Japan on November 3, 2024 and sell it today you would earn a total of 500.00 from holding Canon Marketing Japan or generate 18.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canon Marketing Japan vs. FirstGroup plc
Performance |
| Timeline |
| Canon Marketing Japan |
| FirstGroup plc |
Canon Marketing and FirstGroup Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canon Marketing and FirstGroup Plc
The main advantage of trading using opposite Canon Marketing and FirstGroup Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canon Marketing position performs unexpectedly, FirstGroup Plc 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 FirstGroup Plc will offset losses from the drop in FirstGroup Plc's long position.| Canon Marketing vs. AAC TECHNOLOGHLDGADR | Canon Marketing vs. SOFI TECHNOLOGIES | Canon Marketing vs. Merit Medical Systems | Canon Marketing vs. BioNTech SE |
| FirstGroup Plc vs. QBE Insurance Group | FirstGroup Plc vs. InPlay Oil Corp | FirstGroup Plc vs. PLAYTECH | FirstGroup Plc vs. Reinsurance Group of |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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