Correlation Between Constellation Brands and Canon
Can any of the company-specific risk be diversified away by investing in both Constellation Brands 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 Constellation Brands and Canon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Constellation Brands Class and Canon Inc ADR, you can compare the effects of market volatilities on Constellation Brands 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 Constellation Brands with a short position of Canon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellation Brands and Canon.
Diversification Opportunities for Constellation Brands and Canon
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Constellation and Canon is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Brands Class 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 Constellation Brands 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 Constellation Brands Class 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 Constellation Brands i.e., Constellation Brands and Canon go up and down completely randomly.
Pair Corralation between Constellation Brands and Canon
If you would invest 2,190 in Canon Inc ADR on October 20, 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 | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Constellation Brands Class vs. Canon Inc ADR
Performance |
| Timeline |
| Constellation Brands |
| Canon Inc ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Constellation Brands and Canon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Constellation Brands and Canon
The main advantage of trading using opposite Constellation Brands and Canon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Constellation Brands 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.| Constellation Brands vs. Brown Forman | Constellation Brands vs. MGP Ingredients | Constellation Brands vs. Brown Forman | Constellation Brands vs. Diageo PLC ADR |
| Canon vs. Primoris Services | Canon vs. Sun Life Financial | Canon vs. Goosehead Insurance | Canon vs. CECO Environmental Corp |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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