Correlation Between Safety Insurance and Canon Marketing
Can any of the company-specific risk be diversified away by investing in both Safety Insurance 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 Safety Insurance and Canon Marketing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safety Insurance Group and Canon Marketing Japan, you can compare the effects of market volatilities on Safety Insurance 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 Safety Insurance with a short position of Canon Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Insurance and Canon Marketing.
Diversification Opportunities for Safety Insurance and Canon Marketing
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Safety and Canon is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Safety Insurance Group 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 Safety Insurance 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 Safety Insurance 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 Japan has no effect on the direction of Safety Insurance i.e., Safety Insurance and Canon Marketing go up and down completely randomly.
Pair Corralation between Safety Insurance and Canon Marketing
Assuming the 90 days horizon Safety Insurance is expected to generate 2.18 times less return on investment than Canon Marketing. But when comparing it to its historical volatility, Safety Insurance Group is 1.13 times less risky than Canon Marketing. It trades about 0.05 of its potential returns per unit of risk. Canon Marketing Japan is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,720 in Canon Marketing Japan on August 31, 2024 and sell it today you would earn a total of 240.00 from holding Canon Marketing Japan or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safety Insurance Group vs. Canon Marketing Japan
Performance |
| Timeline |
| Safety Insurance |
| Canon Marketing Japan |
Safety Insurance and Canon Marketing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Insurance and Canon Marketing
The main advantage of trading using opposite Safety Insurance and Canon Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Insurance 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.| Safety Insurance vs. Chuangs China Investments | Safety Insurance vs. UNIVERSAL MUSIC GROUP | Safety Insurance vs. Gladstone Investment | Safety Insurance vs. BURLINGTON STORES |
| Canon Marketing vs. Eidesvik Offshore ASA | Canon Marketing vs. WT OFFSHORE | Canon Marketing vs. SIEM OFFSHORE NEW | Canon Marketing vs. SOLSTAD OFFSHORE NK |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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