Correlation Between CANON MARKETING and National Retail
Can any of the company-specific risk be diversified away by investing in both CANON MARKETING and National Retail 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 National Retail 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 National Retail Properties, you can compare the effects of market volatilities on CANON MARKETING and National Retail 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 National Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of CANON MARKETING and National Retail.
Diversification Opportunities for CANON MARKETING and National Retail
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CANON and National is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding CANON MARKETING JP and National Retail Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Retail Prop 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 National Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Retail Prop has no effect on the direction of CANON MARKETING i.e., CANON MARKETING and National Retail go up and down completely randomly.
Pair Corralation between CANON MARKETING and National Retail
Assuming the 90 days trading horizon CANON MARKETING is expected to generate 1.05 times less return on investment than National Retail. But when comparing it to its historical volatility, CANON MARKETING JP is 1.16 times less risky than National Retail. It trades about 0.19 of its potential returns per unit of risk. National Retail Properties is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,824 in National Retail Properties on November 28, 2024 and sell it today you would earn a total of 234.00 from holding National Retail Properties or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CANON MARKETING JP vs. National Retail Properties
Performance |
| Timeline |
| CANON MARKETING JP |
| National Retail Prop |
CANON MARKETING and National Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CANON MARKETING and National Retail
The main advantage of trading using opposite CANON MARKETING and National Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CANON MARKETING position performs unexpectedly, National Retail 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 National Retail will offset losses from the drop in National Retail's long position.| CANON MARKETING vs. Sotherly Hotels | CANON MARKETING vs. Emperor Entertainment Hotel | CANON MARKETING vs. INTERCONT HOTELS | CANON MARKETING vs. UNIVERSAL DISPLAY |
| National Retail vs. Silicon Motion Technology | National Retail vs. Sumitomo Chemical | National Retail vs. CREDIT AGRICOLE | National Retail vs. PT Bank Maybank |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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