Correlation Between X FAB and Canon Marketing
Can any of the company-specific risk be diversified away by investing in both X FAB 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 X FAB and Canon Marketing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X FAB Silicon Foundries and Canon Marketing Japan, you can compare the effects of market volatilities on X FAB 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 X FAB with a short position of Canon Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Canon Marketing.
Diversification Opportunities for X FAB and Canon Marketing
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between XFB and Canon is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries 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 X FAB 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 X FAB Silicon Foundries 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 X FAB i.e., X FAB and Canon Marketing go up and down completely randomly.
Pair Corralation between X FAB and Canon Marketing
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the Canon Marketing. In addition to that, X FAB is 1.57 times more volatile than Canon Marketing Japan. It trades about -0.02 of its total potential returns per unit of risk. Canon Marketing Japan is currently generating about 0.06 per unit of volatility. If you would invest 2,040 in Canon Marketing Japan on October 11, 2024 and sell it today you would earn a total of 1,040 from holding Canon Marketing Japan or generate 50.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Canon Marketing Japan
Performance |
| Timeline |
| X FAB Silicon |
| Canon Marketing Japan |
X FAB and Canon Marketing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Canon Marketing
The main advantage of trading using opposite X FAB and Canon Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB 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.| X FAB vs. Constellation Software | X FAB vs. CyberArk Software | X FAB vs. Daito Trust Construction | X FAB vs. WIMFARM SA EO |
| Canon Marketing vs. X FAB Silicon Foundries | Canon Marketing vs. MICRONIC MYDATA | Canon Marketing vs. Alfa Financial Software | Canon Marketing vs. CSSC Offshore Marine |
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 CEOs Directory module to screen CEOs from public companies around the world.
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