Correlation Between Canon and Canon Marketing
Can any of the company-specific risk be diversified away by investing in both Canon and Canon Marketing 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 Canon Marketing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canon Inc and Canon Marketing Japan, you can compare the effects of market volatilities on Canon and Canon Marketing 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 Canon Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canon and Canon Marketing.
Diversification Opportunities for Canon and Canon Marketing
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canon and Canon is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Canon Inc and Canon Marketing Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Marketing Japan 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 Canon Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Marketing Japan has no effect on the direction of Canon i.e., Canon and Canon Marketing go up and down completely randomly.
Pair Corralation between Canon and Canon Marketing
Assuming the 90 days trading horizon Canon Inc is expected to under-perform the Canon Marketing. In addition to that, Canon is 1.36 times more volatile than Canon Marketing Japan. It trades about -0.07 of its total potential returns per unit of risk. Canon Marketing Japan is currently generating about 0.02 per unit of volatility. If you would invest 2,960 in Canon Marketing Japan on October 26, 2024 and sell it today you would earn a total of 20.00 from holding Canon Marketing Japan or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canon Inc vs. Canon Marketing Japan
Performance |
| Timeline |
| Canon Inc |
| Canon Marketing Japan |
Canon and Canon Marketing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canon and Canon Marketing
The main advantage of trading using opposite Canon and Canon Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canon position performs unexpectedly, Canon Marketing 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 Canon Marketing will offset losses from the drop in Canon Marketing's long position.| Canon vs. ALERION CLEANPOWER | Canon vs. Thai Beverage Public | Canon vs. Ultra Clean Holdings | Canon vs. SENECA FOODS A |
| Canon Marketing vs. Canon Inc | Canon Marketing vs. Canon Inc | Canon Marketing vs. Superior Plus Corp | Canon Marketing vs. Intel |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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