Correlation Between CANON MARKETING and HEMISPHERE EGY
Can any of the company-specific risk be diversified away by investing in both CANON MARKETING and HEMISPHERE EGY 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 HEMISPHERE EGY 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 HEMISPHERE EGY, you can compare the effects of market volatilities on CANON MARKETING and HEMISPHERE EGY 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 HEMISPHERE EGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of CANON MARKETING and HEMISPHERE EGY.
Diversification Opportunities for CANON MARKETING and HEMISPHERE EGY
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CANON and HEMISPHERE is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding CANON MARKETING JP and HEMISPHERE EGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEMISPHERE EGY 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 HEMISPHERE EGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEMISPHERE EGY has no effect on the direction of CANON MARKETING i.e., CANON MARKETING and HEMISPHERE EGY go up and down completely randomly.
Pair Corralation between CANON MARKETING and HEMISPHERE EGY
Assuming the 90 days trading horizon CANON MARKETING JP is expected to generate 2.44 times more return on investment than HEMISPHERE EGY. However, CANON MARKETING is 2.44 times more volatile than HEMISPHERE EGY. It trades about 0.09 of its potential returns per unit of risk. HEMISPHERE EGY is currently generating about -0.13 per unit of risk. If you would invest 3,100 in CANON MARKETING JP on November 6, 2024 and sell it today you would earn a total of 80.00 from holding CANON MARKETING JP or generate 2.58% 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. HEMISPHERE EGY
Performance |
| Timeline |
| CANON MARKETING JP |
| HEMISPHERE EGY |
CANON MARKETING and HEMISPHERE EGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CANON MARKETING and HEMISPHERE EGY
The main advantage of trading using opposite CANON MARKETING and HEMISPHERE EGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CANON MARKETING position performs unexpectedly, HEMISPHERE EGY 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 HEMISPHERE EGY will offset losses from the drop in HEMISPHERE EGY's long position.| CANON MARKETING vs. Jacquet Metal Service | CANON MARKETING vs. FIREWEED METALS P | CANON MARKETING vs. THRACE PLASTICS | CANON MARKETING vs. China National Building |
| HEMISPHERE EGY vs. PENN Entertainment | HEMISPHERE EGY vs. China Communications Services | HEMISPHERE EGY vs. Verizon Communications | HEMISPHERE EGY vs. Live Nation Entertainment |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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