Correlation Between Canon and Aeon
Can any of the company-specific risk be diversified away by investing in both Canon and Aeon 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 Aeon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canon Inc and Aeon Co, you can compare the effects of market volatilities on Canon and Aeon 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 Aeon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canon and Aeon.
Diversification Opportunities for Canon and Aeon
Excellent diversification
The 3 months correlation between Canon and Aeon is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Canon Inc and Aeon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon 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 Aeon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeon has no effect on the direction of Canon i.e., Canon and Aeon go up and down completely randomly.
Pair Corralation between Canon and Aeon
Assuming the 90 days trading horizon Canon Inc is expected to generate 1.31 times more return on investment than Aeon. However, Canon is 1.31 times more volatile than Aeon Co. It trades about 0.08 of its potential returns per unit of risk. Aeon Co is currently generating about 0.06 per unit of risk. If you would invest 2,250 in Canon Inc on September 14, 2024 and sell it today you would earn a total of 930.00 from holding Canon Inc or generate 41.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canon Inc vs. Aeon Co
Performance |
| Timeline |
| Canon Inc |
| Aeon |
Canon and Aeon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canon and Aeon
The main advantage of trading using opposite Canon and Aeon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canon position performs unexpectedly, Aeon 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 Aeon will offset losses from the drop in Aeon's long position.| Canon vs. Direct Line Insurance | Canon vs. MAGNUM MINING EXP | Canon vs. SIEM OFFSHORE NEW | Canon vs. MINCO SILVER |
| Aeon vs. DISTRICT METALS | Aeon vs. STMicroelectronics NV | Aeon vs. AOI Electronics Co | Aeon vs. Meiko Electronics Co |
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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