Correlation Between Canon Marketing and Caseys General

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

By analyzing existing cross correlation between Canon Marketing Japan and Caseys General Stores, you can compare the effects of market volatilities on Canon Marketing and Caseys General 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 Marketing with a short position of Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canon Marketing and Caseys General.

Diversification Opportunities for Canon Marketing and Caseys General

0.68

Correlation Coefficient

Canon Marketing  Caseys General

Poor diversification

The 3 months correlation between Canon and Caseys is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Canon Marketing Japan and Caseys General Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caseys General Stores and Canon Marketing 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 Marketing Japan are associated (or correlated) with Caseys General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caseys General Stores has no effect on the direction of Canon Marketing i.e., Canon Marketing and Caseys General go up and down completely randomly.

Pair Corralation between Canon Marketing and Caseys General

Assuming the 90 days horizon Canon Marketing Japan is expected to under-perform the Caseys General. In addition to that, Canon Marketing is 1.4 times more volatile than Caseys General Stores. It trades about -0.21 of its total potential returns per unit of risk. Caseys General Stores is currently generating about -0.12 per unit of volatility. If you would invest  38,400  in Caseys General Stores on October 22, 2024 and sell it today you would lose (600.00) from holding Caseys General Stores or give up 1.56% of portfolio value over 90 days.

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

Canon Marketing Japan  vs.  Caseys General Stores

Canon Marketing Japan

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Canon Marketing Japan are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Canon Marketing may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Caseys General Stores

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Caseys General is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Canon Marketing and Caseys General

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

The idea behind Canon Marketing Japan and Caseys General Stores 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.