Correlation Between Canon and Hang Seng
Can any of the company-specific risk be diversified away by investing in both Canon and Hang Seng 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 Hang Seng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canon Inc and Hang Seng Bank, you can compare the effects of market volatilities on Canon and Hang Seng 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 Hang Seng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canon and Hang Seng.
Diversification Opportunities for Canon and Hang Seng
Average diversification
The 3 months correlation between Canon and Hang is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Canon Inc and Hang Seng Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hang Seng Bank 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 Hang Seng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hang Seng Bank has no effect on the direction of Canon i.e., Canon and Hang Seng go up and down completely randomly.
Pair Corralation between Canon and Hang Seng
Assuming the 90 days trading horizon Canon Inc is expected to generate 1.68 times more return on investment than Hang Seng. However, Canon is 1.68 times more volatile than Hang Seng Bank. It trades about 0.13 of its potential returns per unit of risk. Hang Seng Bank is currently generating about 0.0 per unit of risk. If you would invest 2,880 in Canon Inc on September 4, 2024 and sell it today you would earn a total of 120.00 from holding Canon Inc or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Canon Inc vs. Hang Seng Bank
Performance |
| Timeline |
| Canon Inc |
| Hang Seng Bank |
Canon and Hang Seng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canon and Hang Seng
The main advantage of trading using opposite Canon and Hang Seng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canon position performs unexpectedly, Hang Seng 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 Hang Seng will offset losses from the drop in Hang Seng's long position.| Canon vs. Fukuyama Transporting Co | Canon vs. American Homes 4 | Canon vs. SPORT LISBOA E | Canon vs. USWE SPORTS AB |
| Hang Seng vs. Austevoll Seafood ASA | Hang Seng vs. Federal Agricultural Mortgage | Hang Seng vs. Cal Maine Foods | Hang Seng vs. Titan Machinery |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |