Correlation Between CANON MARKETING and UNITED UTILITIES
Can any of the company-specific risk be diversified away by investing in both CANON MARKETING and UNITED UTILITIES 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 UNITED UTILITIES 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 UNITED UTILITIES GR, you can compare the effects of market volatilities on CANON MARKETING and UNITED UTILITIES 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 UNITED UTILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of CANON MARKETING and UNITED UTILITIES.
Diversification Opportunities for CANON MARKETING and UNITED UTILITIES
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CANON and UNITED is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CANON MARKETING JP and UNITED UTILITIES GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED UTILITIES 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 UNITED UTILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED UTILITIES has no effect on the direction of CANON MARKETING i.e., CANON MARKETING and UNITED UTILITIES go up and down completely randomly.
Pair Corralation between CANON MARKETING and UNITED UTILITIES
Assuming the 90 days trading horizon CANON MARKETING JP is expected to generate 1.0 times more return on investment than UNITED UTILITIES. However, CANON MARKETING is 1.0 times more volatile than UNITED UTILITIES GR. It trades about 0.06 of its potential returns per unit of risk. UNITED UTILITIES GR is currently generating about 0.04 per unit of risk. If you would invest 2,000 in CANON MARKETING JP on August 31, 2024 and sell it today you would earn a total of 980.00 from holding CANON MARKETING JP or generate 49.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
CANON MARKETING JP vs. UNITED UTILITIES GR
Performance |
| Timeline |
| CANON MARKETING JP |
| UNITED UTILITIES |
CANON MARKETING and UNITED UTILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CANON MARKETING and UNITED UTILITIES
The main advantage of trading using opposite CANON MARKETING and UNITED UTILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CANON MARKETING position performs unexpectedly, UNITED UTILITIES 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 UNITED UTILITIES will offset losses from the drop in UNITED UTILITIES'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 |
| UNITED UTILITIES vs. SIVERS SEMICONDUCTORS AB | UNITED UTILITIES vs. Darden Restaurants | UNITED UTILITIES vs. Reliance Steel Aluminum | UNITED UTILITIES vs. Q2M Managementberatung AG |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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