Correlation Between CANON MARKETING and New Work
Can any of the company-specific risk be diversified away by investing in both CANON MARKETING and New Work 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 New Work 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 New Work SE, you can compare the effects of market volatilities on CANON MARKETING and New Work 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 New Work. Check out your portfolio center. Please also check ongoing floating volatility patterns of CANON MARKETING and New Work.
Diversification Opportunities for CANON MARKETING and New Work
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CANON and New is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding CANON MARKETING JP and New Work SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Work 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 New Work. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Work SE has no effect on the direction of CANON MARKETING i.e., CANON MARKETING and New Work go up and down completely randomly.
Pair Corralation between CANON MARKETING and New Work
Assuming the 90 days trading horizon CANON MARKETING JP is expected to generate 0.57 times more return on investment than New Work. However, CANON MARKETING JP is 1.75 times less risky than New Work. It trades about 0.07 of its potential returns per unit of risk. New Work SE is currently generating about 0.02 per unit of risk. If you would invest 2,340 in CANON MARKETING JP on September 19, 2024 and sell it today you would earn a total of 840.00 from holding CANON MARKETING JP or generate 35.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CANON MARKETING JP vs. New Work SE
Performance |
| Timeline |
| CANON MARKETING JP |
| New Work SE |
CANON MARKETING and New Work Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CANON MARKETING and New Work
The main advantage of trading using opposite CANON MARKETING and New Work positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CANON MARKETING position performs unexpectedly, New Work 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 New Work will offset losses from the drop in New Work's long position.| CANON MARKETING vs. National Beverage Corp | CANON MARKETING vs. UET United Electronic | CANON MARKETING vs. NorAm Drilling AS | CANON MARKETING vs. Molson Coors Beverage |
| New Work vs. CarsalesCom | New Work vs. ALERION CLEANPOWER | New Work vs. CVW CLEANTECH INC | New Work vs. CANON MARKETING JP |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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