Correlation Between Canon and Markforged Holding

Can any of the company-specific risk be diversified away by investing in both Canon and Markforged Holding 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 Canon and Markforged Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Canon Inc and Markforged Holding Corp, you can compare the effects of market volatilities on Canon and Markforged Holding 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 Canon with a short position of Markforged Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canon and Markforged Holding.

Diversification Opportunities for Canon and Markforged Holding

-0.24

Correlation Coefficient

Canon  Markforged Holding

Very good diversification

The 3 months correlation between Canon and Markforged is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Canon Inc and Markforged Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Markforged Holding Corp and Canon 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 Canon Inc are associated (or correlated) with Markforged Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Markforged Holding Corp has no effect on the direction of Canon i.e., Canon and Markforged Holding go up and down completely randomly.

Pair Corralation between Canon and Markforged Holding

Assuming the 90 days horizon Canon Inc is expected to under-perform the Markforged Holding. But the pink sheet apears to be less risky and, when comparing its historical volatility, Canon Inc is 2.15 times less risky than Markforged Holding. The pink sheet trades about -0.24 of its potential returns per unit of risk. The Markforged Holding Corp is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  297.00  in Markforged Holding Corp on October 24, 2024 and sell it today you would earn a total of  46.00  from holding Markforged Holding Corp or generate 15.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Canon Inc  vs.  Markforged Holding Corp

Canon Inc

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Canon Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Canon is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Markforged Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Markforged Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Canon and Markforged Holding

The main advantage of trading using opposite Canon and Markforged Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canon position performs unexpectedly, Markforged Holding 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 Markforged Holding will offset losses from the drop in Markforged Holding's long position.

The idea behind Canon Inc and Markforged Holding Corp 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 Valuation module to check real value of public entities based on technical and fundamental data.