Correlation Between Canon Marketing and Lowes Companies
Can any of the company-specific risk be diversified away by investing in both Canon Marketing and Lowes Companies 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 Lowes Companies 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 Lowes Companies, you can compare the effects of market volatilities on Canon Marketing and Lowes Companies 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 Lowes Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canon Marketing and Lowes Companies.
Diversification Opportunities for Canon Marketing and Lowes Companies
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Canon and Lowes is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Canon Marketing Japan and Lowes Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowes Companies 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 Lowes Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowes Companies has no effect on the direction of Canon Marketing i.e., Canon Marketing and Lowes Companies go up and down completely randomly.
Pair Corralation between Canon Marketing and Lowes Companies
Assuming the 90 days horizon Canon Marketing Japan is expected to generate 1.0 times more return on investment than Lowes Companies. However, Canon Marketing Japan is 1.0 times less risky than Lowes Companies. It trades about 0.06 of its potential returns per unit of risk. Lowes Companies is currently generating about 0.05 per unit of risk. If you would invest 2,080 in Canon Marketing Japan on September 13, 2024 and sell it today you would earn a total of 960.00 from holding Canon Marketing Japan or generate 46.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canon Marketing Japan vs. Lowes Companies
Performance |
| Timeline |
| Canon Marketing Japan |
| Lowes Companies |
Canon Marketing and Lowes Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canon Marketing and Lowes Companies
The main advantage of trading using opposite Canon Marketing and Lowes Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canon Marketing position performs unexpectedly, Lowes Companies 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 Lowes Companies will offset losses from the drop in Lowes Companies' long position.| Canon Marketing vs. Canon Inc | Canon Marketing vs. Canon Inc | Canon Marketing vs. Ricoh Company | Canon Marketing vs. Brother Industries |
| Lowes Companies vs. Playtech plc | Lowes Companies vs. Canon Marketing Japan | Lowes Companies vs. VIAPLAY GROUP AB | Lowes Companies vs. Fast Retailing Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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