Correlation Between Canon and Olympus
Can any of the company-specific risk be diversified away by investing in both Canon and Olympus 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 Olympus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canon Inc and Olympus, you can compare the effects of market volatilities on Canon and Olympus 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 Olympus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canon and Olympus.
Diversification Opportunities for Canon and Olympus
Very good diversification
The 3 months correlation between Canon and Olympus is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Canon Inc and Olympus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympus 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 Olympus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olympus has no effect on the direction of Canon i.e., Canon and Olympus go up and down completely randomly.
Pair Corralation between Canon and Olympus
Assuming the 90 days trading horizon Canon Inc is expected to generate 1.11 times more return on investment than Olympus. However, Canon is 1.11 times more volatile than Olympus. It trades about 0.08 of its potential returns per unit of risk. Olympus is currently generating about 0.04 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 | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
Canon Inc vs. Olympus
Performance |
| Timeline |
| Canon Inc |
| Olympus |
Canon and Olympus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canon and Olympus
The main advantage of trading using opposite Canon and Olympus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canon position performs unexpectedly, Olympus 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 Olympus will offset losses from the drop in Olympus' long position.| Canon vs. Direct Line Insurance | Canon vs. MAGNUM MINING EXP | Canon vs. SIEM OFFSHORE NEW | Canon vs. MINCO SILVER |
| Olympus vs. Westinghouse Air Brake | Olympus vs. Cars Inc | Olympus vs. Wizz Air Holdings | Olympus vs. Ryanair Holdings plc |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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