Correlation Between Armada Hflr and Canon

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Can any of the company-specific risk be diversified away by investing in both Armada Hflr 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 Armada Hflr and Canon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armada Hflr Pr and Canon Inc, you can compare the effects of market volatilities on Armada Hflr 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 Armada Hflr with a short position of Canon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Canon.

Diversification Opportunities for Armada Hflr and Canon

ArmadaCanonDiversified AwayArmadaCanonDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Armada and Canon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Canon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Inc and Armada Hflr 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 Armada Hflr Pr 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 has no effect on the direction of Armada Hflr i.e., Armada Hflr and Canon go up and down completely randomly.

Pair Corralation between Armada Hflr and Canon

If you would invest (100.00) in Canon Inc on September 24, 2024 and sell it today you would earn a total of  100.00  from holding Canon Inc or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Armada Hflr Pr  vs.  Canon Inc

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -10-8-6-4-2
JavaScript chart by amCharts 3.21.15AHH CAJPY
       Timeline  
Armada Hflr Pr 

Risk-Adjusted Performance

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Over the last 90 days Armada Hflr Pr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec10.210.410.610.81111.211.4
Canon Inc 

Risk-Adjusted Performance

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Weak
 
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Over the last 90 days Canon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Canon is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Armada Hflr and Canon Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.75-2.08-1.4-0.72-0.04590.541.131.722.312.9 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15AHH CAJPY
       Returns  

Pair Trading with Armada Hflr and Canon

The main advantage of trading using opposite Armada Hflr and Canon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr 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.
The idea behind Armada Hflr Pr and Canon Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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