Correlation Between Sandfire Resources and Canon Marketing
Can any of the company-specific risk be diversified away by investing in both Sandfire Resources 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 Sandfire Resources and Canon Marketing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sandfire Resources Limited and Canon Marketing Japan, you can compare the effects of market volatilities on Sandfire Resources 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 Sandfire Resources with a short position of Canon Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandfire Resources and Canon Marketing.
Diversification Opportunities for Sandfire Resources and Canon Marketing
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sandfire and Canon is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sandfire Resources Limited and Canon Marketing Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Marketing Japan and Sandfire Resources 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 Sandfire Resources Limited 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 Japan has no effect on the direction of Sandfire Resources i.e., Sandfire Resources and Canon Marketing go up and down completely randomly.
Pair Corralation between Sandfire Resources and Canon Marketing
Assuming the 90 days horizon Sandfire Resources Limited is expected to generate 1.38 times more return on investment than Canon Marketing. However, Sandfire Resources is 1.38 times more volatile than Canon Marketing Japan. It trades about 0.07 of its potential returns per unit of risk. Canon Marketing Japan is currently generating about 0.05 per unit of risk. If you would invest 498.00 in Sandfire Resources Limited on October 26, 2024 and sell it today you would earn a total of 97.00 from holding Sandfire Resources Limited or generate 19.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Sandfire Resources Limited vs. Canon Marketing Japan
Performance |
| Timeline |
| Sandfire Resources |
| Canon Marketing Japan |
Sandfire Resources and Canon Marketing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandfire Resources and Canon Marketing
The main advantage of trading using opposite Sandfire Resources and Canon Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandfire Resources 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.| Sandfire Resources vs. Canon Marketing Japan | Sandfire Resources vs. Salesforce | Sandfire Resources vs. HELIOS TECHS INC | Sandfire Resources vs. FLOW TRADERS LTD |
| Canon Marketing vs. Canon Inc | Canon Marketing vs. Canon Inc | Canon Marketing vs. Superior Plus Corp | Canon Marketing vs. Intel |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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