Correlation Between CANON MARKETING and Safety Insurance
Can any of the company-specific risk be diversified away by investing in both CANON MARKETING and Safety Insurance 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 Safety Insurance 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 Safety Insurance Group, you can compare the effects of market volatilities on CANON MARKETING and Safety Insurance 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 Safety Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of CANON MARKETING and Safety Insurance.
Diversification Opportunities for CANON MARKETING and Safety Insurance
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CANON and Safety is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding CANON MARKETING JP and Safety Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Insurance 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 Safety Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Insurance has no effect on the direction of CANON MARKETING i.e., CANON MARKETING and Safety Insurance go up and down completely randomly.
Pair Corralation between CANON MARKETING and Safety Insurance
Assuming the 90 days trading horizon CANON MARKETING JP is expected to generate 0.98 times more return on investment than Safety Insurance. However, CANON MARKETING JP is 1.02 times less risky than Safety Insurance. It trades about 0.09 of its potential returns per unit of risk. Safety Insurance Group is currently generating about 0.05 per unit of risk. If you would invest 2,760 in CANON MARKETING JP on August 30, 2024 and sell it today you would earn a total of 220.00 from holding CANON MARKETING JP or generate 7.97% 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. Safety Insurance Group
Performance |
| Timeline |
| CANON MARKETING JP |
| Safety Insurance |
CANON MARKETING and Safety Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CANON MARKETING and Safety Insurance
The main advantage of trading using opposite CANON MARKETING and Safety Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CANON MARKETING position performs unexpectedly, Safety Insurance 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 Safety Insurance will offset losses from the drop in Safety Insurance's long position.| CANON MARKETING vs. Fukuyama Transporting Co | CANON MARKETING vs. Ming Le Sports | CANON MARKETING vs. Jacquet Metal Service | CANON MARKETING vs. Darden Restaurants |
| Safety Insurance vs. Chuangs China Investments | Safety Insurance vs. UNIVERSAL MUSIC GROUP | Safety Insurance vs. Gladstone Investment | Safety Insurance vs. BURLINGTON STORES |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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