Correlation Between CANON MARKETING and Fukuoka Financial

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

By analyzing existing cross correlation between CANON MARKETING JP and Fukuoka Financial Group, you can compare the effects of market volatilities on CANON MARKETING and Fukuoka Financial 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 Fukuoka Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CANON MARKETING and Fukuoka Financial.

Diversification Opportunities for CANON MARKETING and Fukuoka Financial

0.84

Correlation Coefficient

CANON MARKETING  Fukuoka Financial

Very poor diversification

The 3 months correlation between CANON and Fukuoka is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding CANON MARKETING JP and Fukuoka Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fukuoka Financial 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 JP are associated (or correlated) with Fukuoka Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fukuoka Financial has no effect on the direction of CANON MARKETING i.e., CANON MARKETING and Fukuoka Financial go up and down completely randomly.

Pair Corralation between CANON MARKETING and Fukuoka Financial

Assuming the 90 days trading horizon CANON MARKETING JP is expected to generate 0.69 times more return on investment than Fukuoka Financial. However, CANON MARKETING JP is 1.44 times less risky than Fukuoka Financial. It trades about 0.1 of its potential returns per unit of risk. Fukuoka Financial Group is currently generating about -0.01 per unit of risk. If you would invest  2,540  in CANON MARKETING JP on September 29, 2024 and sell it today you would earn a total of  580.00  from holding CANON MARKETING JP or generate 22.83% return on investment over 90 days.

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

CANON MARKETING JP  vs.  Fukuoka Financial Group

CANON MARKETING JP

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CANON MARKETING JP are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile forward-looking indicators, CANON MARKETING may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fukuoka Financial

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fukuoka Financial Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Fukuoka Financial is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CANON MARKETING and Fukuoka Financial

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

The idea behind CANON MARKETING JP and Fukuoka Financial Group 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.