Correlation Between Canon and InPlay Oil
Can any of the company-specific risk be diversified away by investing in both Canon and InPlay Oil 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 and InPlay Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canon Inc and InPlay Oil Corp, you can compare the effects of market volatilities on Canon and InPlay Oil 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 with a short position of InPlay Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canon and InPlay Oil.
Diversification Opportunities for Canon and InPlay Oil
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Canon and InPlay is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Canon Inc and InPlay Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InPlay Oil Corp and Canon 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 Inc are associated (or correlated) with InPlay Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InPlay Oil Corp has no effect on the direction of Canon i.e., Canon and InPlay Oil go up and down completely randomly.
Pair Corralation between Canon and InPlay Oil
Assuming the 90 days trading horizon Canon Inc is expected to generate 1.02 times more return on investment than InPlay Oil. However, Canon is 1.02 times more volatile than InPlay Oil Corp. It trades about 0.06 of its potential returns per unit of risk. InPlay Oil Corp is currently generating about -0.02 per unit of risk. If you would invest 2,185 in Canon Inc on August 30, 2024 and sell it today you would earn a total of 969.00 from holding Canon Inc or generate 44.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canon Inc vs. InPlay Oil Corp
Performance |
| Timeline |
| Canon Inc |
| InPlay Oil Corp |
Canon and InPlay Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canon and InPlay Oil
The main advantage of trading using opposite Canon and InPlay Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canon position performs unexpectedly, InPlay Oil 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 InPlay Oil will offset losses from the drop in InPlay Oil's long position.| Canon vs. CapitaLand Investment Limited | Canon vs. Monster Beverage Corp | Canon vs. Apollo Investment Corp | Canon vs. Virtus Investment Partners |
| InPlay Oil vs. Carsales | InPlay Oil vs. GigaMedia | InPlay Oil vs. GRUPO CARSO A1 | InPlay Oil vs. Prosiebensat 1 Media |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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