Correlation Between Old Dominion and Canon
Can any of the company-specific risk be diversified away by investing in both Old Dominion 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 Old Dominion and Canon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Dominion Freight and Canon Inc ADR, you can compare the effects of market volatilities on Old Dominion 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 Old Dominion with a short position of Canon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Dominion and Canon.
Diversification Opportunities for Old Dominion and Canon
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Old and Canon is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Old Dominion Freight 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 Old Dominion 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 Old Dominion Freight 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 Old Dominion i.e., Old Dominion and Canon go up and down completely randomly.
Pair Corralation between Old Dominion and Canon
If you would invest 2,190 in Canon Inc ADR on October 7, 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 | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Old Dominion Freight vs. Canon Inc ADR
Performance |
| Timeline |
| Old Dominion Freight |
| Canon Inc ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Old Dominion and Canon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Dominion and Canon
The main advantage of trading using opposite Old Dominion and Canon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Dominion 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.| Old Dominion vs. ArcBest Corp | Old Dominion vs. Marten Transport | Old Dominion vs. Werner Enterprises | Old Dominion vs. Knight Transportation |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |