Correlation Between Canon and FAST RETAIL
Can any of the company-specific risk be diversified away by investing in both Canon and FAST RETAIL 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 FAST RETAIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canon Inc and FAST RETAIL ADR, you can compare the effects of market volatilities on Canon and FAST RETAIL 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 FAST RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canon and FAST RETAIL.
Diversification Opportunities for Canon and FAST RETAIL
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Canon and FAST is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Canon Inc and FAST RETAIL ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAST RETAIL ADR 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 FAST RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAST RETAIL ADR has no effect on the direction of Canon i.e., Canon and FAST RETAIL go up and down completely randomly.
Pair Corralation between Canon and FAST RETAIL
Assuming the 90 days trading horizon Canon is expected to generate 1.79 times less return on investment than FAST RETAIL. But when comparing it to its historical volatility, Canon Inc is 1.07 times less risky than FAST RETAIL. It trades about 0.09 of its potential returns per unit of risk. FAST RETAIL ADR is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,980 in FAST RETAIL ADR on September 1, 2024 and sell it today you would earn a total of 180.00 from holding FAST RETAIL ADR or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Canon Inc vs. FAST RETAIL ADR
Performance |
| Timeline |
| Canon Inc |
| FAST RETAIL ADR |
Canon and FAST RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canon and FAST RETAIL
The main advantage of trading using opposite Canon and FAST RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canon position performs unexpectedly, FAST RETAIL 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 FAST RETAIL will offset losses from the drop in FAST RETAIL's long position.| Canon vs. FAST RETAIL ADR | Canon vs. 24SEVENOFFICE GROUP AB | Canon vs. Carsales | Canon vs. RETAIL FOOD GROUP |
| FAST RETAIL vs. AOYAMA TRADING | FAST RETAIL vs. Global Fashion Group | FAST RETAIL vs. Superior Plus Corp | FAST RETAIL vs. NMI Holdings |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |