Correlation Between Canon and One Stop

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

By analyzing existing cross correlation between Canon Inc and One Stop Systems, you can compare the effects of market volatilities on Canon and One Stop 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 One Stop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canon and One Stop.

Diversification Opportunities for Canon and One Stop

-0.2

Correlation Coefficient

Canon  One Stop

Good diversification

The 3 months correlation between Canon and One is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Canon Inc and One Stop Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Stop Systems 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 One Stop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Stop Systems has no effect on the direction of Canon i.e., Canon and One Stop go up and down completely randomly.

Pair Corralation between Canon and One Stop

Assuming the 90 days horizon Canon Inc is expected to generate 0.36 times more return on investment than One Stop. However, Canon Inc is 2.81 times less risky than One Stop. It trades about 0.02 of its potential returns per unit of risk. One Stop Systems is currently generating about -0.03 per unit of risk. If you would invest  3,237  in Canon Inc on December 27, 2024 and sell it today you would earn a total of  33.00  from holding Canon Inc or generate 1.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.33%
Values	Daily Returns

Canon Inc  vs.  One Stop Systems

Canon Inc

Risk-Adjusted Performance

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.

One Stop Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days One Stop Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Canon and One Stop

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

The idea behind Canon Inc and One Stop Systems 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.