Correlation Between CANON MARKETING and Canadian Utilities
Can any of the company-specific risk be diversified away by investing in both CANON MARKETING and Canadian Utilities 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 Canadian Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CANON MARKETING JP and Canadian Utilities Limited, you can compare the effects of market volatilities on CANON MARKETING and Canadian Utilities 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 Canadian Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of CANON MARKETING and Canadian Utilities.
Diversification Opportunities for CANON MARKETING and Canadian Utilities
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CANON and Canadian is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding CANON MARKETING JP and Canadian Utilities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities 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 JP are associated (or correlated) with Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of CANON MARKETING i.e., CANON MARKETING and Canadian Utilities go up and down completely randomly.
Pair Corralation between CANON MARKETING and Canadian Utilities
Assuming the 90 days trading horizon CANON MARKETING JP is expected to generate 0.77 times more return on investment than Canadian Utilities. However, CANON MARKETING JP is 1.3 times less risky than Canadian Utilities. It trades about 0.44 of its potential returns per unit of risk. Canadian Utilities Limited is currently generating about 0.19 per unit of risk. If you would invest 2,760 in CANON MARKETING JP on September 2, 2024 and sell it today you would earn a total of 280.00 from holding CANON MARKETING JP or generate 10.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CANON MARKETING JP vs. Canadian Utilities Limited
Performance |
| Timeline |
| CANON MARKETING JP |
| Canadian Utilities |
CANON MARKETING and Canadian Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CANON MARKETING and Canadian Utilities
The main advantage of trading using opposite CANON MARKETING and Canadian Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CANON MARKETING position performs unexpectedly, Canadian Utilities 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 Canadian Utilities will offset losses from the drop in Canadian Utilities' long position.| CANON MARKETING vs. SIVERS SEMICONDUCTORS AB | CANON MARKETING vs. Darden Restaurants | CANON MARKETING vs. Reliance Steel Aluminum | CANON MARKETING vs. Q2M Managementberatung AG |
| Canadian Utilities vs. British American Tobacco | Canadian Utilities vs. CANON MARKETING JP | Canadian Utilities vs. TRADEGATE | Canadian Utilities vs. Auto Trader Group |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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