Correlation Between CANON MARKETING and HomeToGo
Can any of the company-specific risk be diversified away by investing in both CANON MARKETING and HomeToGo 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 HomeToGo 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 HomeToGo SE, you can compare the effects of market volatilities on CANON MARKETING and HomeToGo 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 HomeToGo. Check out your portfolio center. Please also check ongoing floating volatility patterns of CANON MARKETING and HomeToGo.
Diversification Opportunities for CANON MARKETING and HomeToGo
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CANON and HomeToGo is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding CANON MARKETING JP and HomeToGo SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeToGo SE 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 HomeToGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeToGo SE has no effect on the direction of CANON MARKETING i.e., CANON MARKETING and HomeToGo go up and down completely randomly.
Pair Corralation between CANON MARKETING and HomeToGo
Assuming the 90 days trading horizon CANON MARKETING is expected to generate 4.8 times less return on investment than HomeToGo. But when comparing it to its historical volatility, CANON MARKETING JP is 2.14 times less risky than HomeToGo. It trades about 0.04 of its potential returns per unit of risk. HomeToGo SE is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 190.00 in HomeToGo SE on August 28, 2024 and sell it today you would earn a total of 20.00 from holding HomeToGo SE or generate 10.53% 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. HomeToGo SE
Performance |
| Timeline |
| CANON MARKETING JP |
| HomeToGo SE |
CANON MARKETING and HomeToGo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CANON MARKETING and HomeToGo
The main advantage of trading using opposite CANON MARKETING and HomeToGo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CANON MARKETING position performs unexpectedly, HomeToGo 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 HomeToGo will offset losses from the drop in HomeToGo's long position.| CANON MARKETING vs. Apple Inc | CANON MARKETING vs. Apple Inc | CANON MARKETING vs. Microsoft | CANON MARKETING vs. Microsoft |
| HomeToGo vs. Ryanair Holdings plc | HomeToGo vs. SYSTEMAIR AB | HomeToGo vs. Harmony Gold Mining | HomeToGo vs. Westinghouse Air Brake |
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 Stocks Directory module to find actively traded stocks across global markets.
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