Correlation Between Insurance Australia and CANON MARKETING
Can any of the company-specific risk be diversified away by investing in both Insurance Australia and CANON MARKETING 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 Insurance Australia and CANON MARKETING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insurance Australia Group and CANON MARKETING JP, you can compare the effects of market volatilities on Insurance Australia and CANON MARKETING 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 Insurance Australia with a short position of CANON MARKETING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and CANON MARKETING.
Diversification Opportunities for Insurance Australia and CANON MARKETING
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Insurance and CANON is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group and CANON MARKETING JP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CANON MARKETING JP and Insurance Australia 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 Insurance Australia Group are associated (or correlated) with CANON MARKETING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CANON MARKETING JP has no effect on the direction of Insurance Australia i.e., Insurance Australia and CANON MARKETING go up and down completely randomly.
Pair Corralation between Insurance Australia and CANON MARKETING
Assuming the 90 days horizon Insurance Australia is expected to generate 1.1 times less return on investment than CANON MARKETING. In addition to that, Insurance Australia is 1.19 times more volatile than CANON MARKETING JP. It trades about 0.08 of its total potential returns per unit of risk. CANON MARKETING JP is currently generating about 0.11 per unit of volatility. If you would invest 2,720 in CANON MARKETING JP on August 31, 2024 and sell it today you would earn a total of 260.00 from holding CANON MARKETING JP or generate 9.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insurance Australia Group vs. CANON MARKETING JP
Performance |
| Timeline |
| Insurance Australia |
| CANON MARKETING JP |
Insurance Australia and CANON MARKETING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insurance Australia and CANON MARKETING
The main advantage of trading using opposite Insurance Australia and CANON MARKETING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia position performs unexpectedly, CANON MARKETING 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 MARKETING will offset losses from the drop in CANON MARKETING's long position.| Insurance Australia vs. BURLINGTON STORES | Insurance Australia vs. DELTA AIR LINES | Insurance Australia vs. Burlington Stores | Insurance Australia vs. SEALED AIR |
| CANON MARKETING vs. Fukuyama Transporting Co | CANON MARKETING vs. Ming Le Sports | CANON MARKETING vs. Jacquet Metal Service | CANON MARKETING vs. Darden Restaurants |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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