Correlation Between CANON MARKETING and PICKN PAY
Can any of the company-specific risk be diversified away by investing in both CANON MARKETING and PICKN PAY 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 PICKN PAY 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 PICKN PAY STORES, you can compare the effects of market volatilities on CANON MARKETING and PICKN PAY 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 PICKN PAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of CANON MARKETING and PICKN PAY.
Diversification Opportunities for CANON MARKETING and PICKN PAY
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CANON and PICKN is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding CANON MARKETING JP and PICKN PAY STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICKN PAY STORES 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 PICKN PAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICKN PAY STORES has no effect on the direction of CANON MARKETING i.e., CANON MARKETING and PICKN PAY go up and down completely randomly.
Pair Corralation between CANON MARKETING and PICKN PAY
Assuming the 90 days trading horizon CANON MARKETING is expected to generate 2.47 times less return on investment than PICKN PAY. But when comparing it to its historical volatility, CANON MARKETING JP is 2.0 times less risky than PICKN PAY. It trades about 0.33 of its potential returns per unit of risk. PICKN PAY STORES is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 129.00 in PICKN PAY STORES on September 14, 2024 and sell it today you would earn a total of 28.00 from holding PICKN PAY STORES or generate 21.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CANON MARKETING JP vs. PICKN PAY STORES
Performance |
| Timeline |
| CANON MARKETING JP |
| PICKN PAY STORES |
CANON MARKETING and PICKN PAY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CANON MARKETING and PICKN PAY
The main advantage of trading using opposite CANON MARKETING and PICKN PAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CANON MARKETING position performs unexpectedly, PICKN PAY 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 PICKN PAY will offset losses from the drop in PICKN PAY's long position.| CANON MARKETING vs. Apple Inc | CANON MARKETING vs. Apple Inc | CANON MARKETING vs. Apple Inc | CANON MARKETING vs. Apple Inc |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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