Correlation Between CANON MARKETING and COSCO SHIPPING
Can any of the company-specific risk be diversified away by investing in both CANON MARKETING and COSCO SHIPPING 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 COSCO SHIPPING 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 COSCO SHIPPING Energy, you can compare the effects of market volatilities on CANON MARKETING and COSCO SHIPPING 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 COSCO SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of CANON MARKETING and COSCO SHIPPING.
Diversification Opportunities for CANON MARKETING and COSCO SHIPPING
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CANON and COSCO is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding CANON MARKETING JP and COSCO SHIPPING Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Energy 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 COSCO SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCO SHIPPING Energy has no effect on the direction of CANON MARKETING i.e., CANON MARKETING and COSCO SHIPPING go up and down completely randomly.
Pair Corralation between CANON MARKETING and COSCO SHIPPING
Assuming the 90 days trading horizon CANON MARKETING is expected to generate 3.53 times less return on investment than COSCO SHIPPING. But when comparing it to its historical volatility, CANON MARKETING JP is 7.18 times less risky than COSCO SHIPPING. It trades about 0.37 of its potential returns per unit of risk. COSCO SHIPPING Energy is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 58.00 in COSCO SHIPPING Energy on September 13, 2024 and sell it today you would earn a total of 17.00 from holding COSCO SHIPPING Energy or generate 29.31% 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. COSCO SHIPPING Energy
Performance |
| Timeline |
| CANON MARKETING JP |
| COSCO SHIPPING Energy |
CANON MARKETING and COSCO SHIPPING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CANON MARKETING and COSCO SHIPPING
The main advantage of trading using opposite CANON MARKETING and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CANON MARKETING position performs unexpectedly, COSCO SHIPPING 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 COSCO SHIPPING will offset losses from the drop in COSCO SHIPPING's long position.| CANON MARKETING vs. Apple Inc | CANON MARKETING vs. Apple Inc | CANON MARKETING vs. Apple Inc | CANON MARKETING vs. Apple Inc |
| COSCO SHIPPING vs. Tri Pointe Homes | COSCO SHIPPING vs. Fair Isaac Corp | COSCO SHIPPING vs. DFS Furniture PLC | COSCO SHIPPING vs. DELTA AIR LINES |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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