Correlation Between Canon Marketing and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Canon Marketing and Solstad Offshore 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 Solstad Offshore 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 Solstad Offshore ASA, you can compare the effects of market volatilities on Canon Marketing and Solstad Offshore 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 Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canon Marketing and Solstad Offshore.
Diversification Opportunities for Canon Marketing and Solstad Offshore
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canon and Solstad is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Canon Marketing Japan and Solstad Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offshore ASA 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 Solstad Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solstad Offshore ASA has no effect on the direction of Canon Marketing i.e., Canon Marketing and Solstad Offshore go up and down completely randomly.
Pair Corralation between Canon Marketing and Solstad Offshore
Assuming the 90 days horizon Canon Marketing is expected to generate 2.35 times less return on investment than Solstad Offshore. But when comparing it to its historical volatility, Canon Marketing Japan is 2.3 times less risky than Solstad Offshore. It trades about 0.06 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 180.00 in Solstad Offshore ASA on October 30, 2024 and sell it today you would earn a total of 158.00 from holding Solstad Offshore ASA or generate 87.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.75% |
| Values | Daily Returns |
Canon Marketing Japan vs. Solstad Offshore ASA
Performance |
| Timeline |
| Canon Marketing Japan |
| Solstad Offshore ASA |
Canon Marketing and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canon Marketing and Solstad Offshore
The main advantage of trading using opposite Canon Marketing and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canon Marketing position performs unexpectedly, Solstad Offshore 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 Solstad Offshore will offset losses from the drop in Solstad Offshore's long position.| Canon Marketing vs. TreeHouse Foods | Canon Marketing vs. Performance Food Group | Canon Marketing vs. FIH MOBILE | Canon Marketing vs. Geely Automobile Holdings |
| Solstad Offshore vs. Nok Airlines PCL | Solstad Offshore vs. China Eastern Airlines | Solstad Offshore vs. International Consolidated Airlines | Solstad Offshore vs. IMPERIAL TOBACCO |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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