Correlation Between Canon Marketing and TRADEDOUBLER

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

Diversification Opportunities for Canon Marketing and TRADEDOUBLER

0.32

Correlation Coefficient

Canon Marketing  TRADEDOUBLER

Weak diversification

The 3 months correlation between Canon and TRADEDOUBLER is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Canon Marketing Japan and TRADEDOUBLER AB SK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEDOUBLER AB SK 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 TRADEDOUBLER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEDOUBLER AB SK has no effect on the direction of Canon Marketing i.e., Canon Marketing and TRADEDOUBLER go up and down completely randomly.

Pair Corralation between Canon Marketing and TRADEDOUBLER

Assuming the 90 days horizon Canon Marketing is expected to generate 61.68 times less return on investment than TRADEDOUBLER. But when comparing it to its historical volatility, Canon Marketing Japan is 4.36 times less risky than TRADEDOUBLER. It trades about 0.01 of its potential returns per unit of risk. TRADEDOUBLER AB SK is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  28.00  in TRADEDOUBLER AB SK on December 31, 2024 and sell it today you would earn a total of  23.00  from holding TRADEDOUBLER AB SK or generate 82.14% return on investment over 90 days.

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

Canon Marketing Japan  vs.  TRADEDOUBLER AB SK

Canon Marketing Japan

Risk-Adjusted Performance

Weak

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

TRADEDOUBLER AB SK

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TRADEDOUBLER AB SK are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRADEDOUBLER reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Canon Marketing and TRADEDOUBLER

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

The idea behind Canon Marketing Japan and TRADEDOUBLER AB SK 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.