Correlation Between CANON MARKETING and LIFE +

Can any of the company-specific risk be diversified away by investing in both CANON MARKETING and LIFE + 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 LIFE + 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 LIFE BANC SPLIT, you can compare the effects of market volatilities on CANON MARKETING and LIFE + 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 LIFE +. Check out your portfolio center. Please also check ongoing floating volatility patterns of CANON MARKETING and LIFE +.

Diversification Opportunities for CANON MARKETING and LIFE +

0.01

Correlation Coefficient

CANON MARKETING  LIFE +

Significant diversification

The 3 months correlation between CANON and LIFE is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding CANON MARKETING JP and LIFE BANC SPLIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFE BANC SPLIT 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 LIFE +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFE BANC SPLIT has no effect on the direction of CANON MARKETING i.e., CANON MARKETING and LIFE + go up and down completely randomly.

Pair Corralation between CANON MARKETING and LIFE +

Assuming the 90 days trading horizon CANON MARKETING JP is expected to generate 0.44 times more return on investment than LIFE +. However, CANON MARKETING JP is 2.26 times less risky than LIFE +. It trades about -0.02 of its potential returns per unit of risk. LIFE BANC SPLIT is currently generating about -0.01 per unit of risk. If you would invest  3,140  in CANON MARKETING JP on December 19, 2024 and sell it today you would lose (60.00) from holding CANON MARKETING JP or give up 1.91% of portfolio value over 90 days.

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

CANON MARKETING JP  vs.  LIFE BANC SPLIT

CANON MARKETING JP

Risk-Adjusted Performance

Very Weak

Over the last 90 days CANON MARKETING JP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking indicators, CANON MARKETING is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

LIFE BANC SPLIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days LIFE BANC SPLIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, LIFE + 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 LIFE +

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

The idea behind CANON MARKETING JP and LIFE BANC SPLIT 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.