Correlation Between Canon Marketing and HNI

Can any of the company-specific risk be diversified away by investing in both Canon Marketing and HNI 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 HNI 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 HNI Corporation, you can compare the effects of market volatilities on Canon Marketing and HNI 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 HNI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canon Marketing and HNI.

Diversification Opportunities for Canon Marketing and HNI

0.18

Correlation Coefficient

Canon Marketing  HNI

Average diversification

The 3 months correlation between Canon and HNI is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Canon Marketing Japan and HNI Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corporation 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 HNI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNI Corporation has no effect on the direction of Canon Marketing i.e., Canon Marketing and HNI go up and down completely randomly.

Pair Corralation between Canon Marketing and HNI

Assuming the 90 days horizon Canon Marketing is expected to generate 1.83 times less return on investment than HNI. But when comparing it to its historical volatility, Canon Marketing Japan is 1.19 times less risky than HNI. It trades about 0.06 of its potential returns per unit of risk. HNI Corporation is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,508  in HNI Corporation on September 3, 2024 and sell it today you would earn a total of  2,692  from holding HNI Corporation or generate 107.34% return on investment over 90 days.

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

Canon Marketing Japan  vs.  HNI Corp.

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 fragile basic indicators, Canon Marketing may actually be approaching a critical reversion point that can send shares even higher in January 2025.

HNI Corporation

Risk-Adjusted Performance

6 of 100

Modest

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

Pair Trading with Canon Marketing and HNI

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

The idea behind Canon Marketing Japan and HNI Corporation 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.