Correlation Between East Africa and Canon
Can any of the company-specific risk be diversified away by investing in both East Africa and Canon 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 East Africa and Canon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East Africa Metals and Canon Inc ADR, you can compare the effects of market volatilities on East Africa and Canon 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 East Africa with a short position of Canon. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Africa and Canon.
Diversification Opportunities for East Africa and Canon
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between East and Canon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding East Africa Metals and Canon Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Inc ADR and East Africa 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 East Africa Metals are associated (or correlated) with Canon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Inc ADR has no effect on the direction of East Africa i.e., East Africa and Canon go up and down completely randomly.
Pair Corralation between East Africa and Canon
If you would invest 2,190 in Canon Inc ADR on October 25, 2024 and sell it today you would earn a total of 0.00 from holding Canon Inc ADR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
East Africa Metals vs. Canon Inc ADR
Performance |
| Timeline |
| East Africa Metals |
| Canon Inc ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
East Africa and Canon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Africa and Canon
The main advantage of trading using opposite East Africa and Canon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Africa position performs unexpectedly, Canon 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 will offset losses from the drop in Canon's long position.| East Africa vs. Arctic Star Exploration | East Africa vs. American Clean Resources | East Africa vs. Arras Minerals Corp | East Africa vs. American Creek Resources |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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