Correlation Between Canon Marketing and KBC GROEP

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Canon Marketing and KBC GROEP 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 KBC GROEP 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 KBC GROEP NV, you can compare the effects of market volatilities on Canon Marketing and KBC GROEP 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 KBC GROEP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canon Marketing and KBC GROEP.

Diversification Opportunities for Canon Marketing and KBC GROEP

0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Canon and KBC is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Canon Marketing Japan and KBC GROEP NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC GROEP NV 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 KBC GROEP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC GROEP NV has no effect on the direction of Canon Marketing i.e., Canon Marketing and KBC GROEP go up and down completely randomly.

Pair Corralation between Canon Marketing and KBC GROEP

Assuming the 90 days horizon Canon Marketing Japan is expected to generate 1.04 times more return on investment than KBC GROEP. However, Canon Marketing is 1.04 times more volatile than KBC GROEP NV. It trades about 0.06 of its potential returns per unit of risk. KBC GROEP NV is currently generating about 0.04 per unit of risk. If you would invest  2,060  in Canon Marketing Japan on October 10, 2024 and sell it today you would earn a total of  1,120  from holding Canon Marketing Japan or generate 54.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Canon Marketing Japan  vs.  KBC GROEP NV

 Performance 
       Timeline  
Canon Marketing Japan 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Canon Marketing Japan are ranked lower than 9 (%) 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 February 2025.
KBC GROEP NV 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in KBC GROEP NV are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, KBC GROEP may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Canon Marketing and KBC GROEP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Canon Marketing and KBC GROEP

The main advantage of trading using opposite Canon Marketing and KBC GROEP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canon Marketing position performs unexpectedly, KBC GROEP 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 KBC GROEP will offset losses from the drop in KBC GROEP's long position.
The idea behind Canon Marketing Japan and KBC GROEP NV 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.
Check out your portfolio center.
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

Other Complementary Tools

Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Technical Analysis
Check basic technical indicators and analysis based on most latest market data