Correlation Between CANON MARKETING and MetLife

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

Diversification Opportunities for CANON MARKETING and MetLife

0.29

Correlation Coefficient

CANON MARKETING  MetLife

Modest diversification

The 3 months correlation between CANON and MetLife is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding CANON MARKETING JP and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife 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 MetLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetLife has no effect on the direction of CANON MARKETING i.e., CANON MARKETING and MetLife go up and down completely randomly.

Pair Corralation between CANON MARKETING and MetLife

Assuming the 90 days trading horizon CANON MARKETING JP is expected to generate 0.75 times more return on investment than MetLife. However, CANON MARKETING JP is 1.34 times less risky than MetLife. It trades about 0.37 of its potential returns per unit of risk. MetLife is currently generating about 0.01 per unit of risk. If you would invest  2,860  in CANON MARKETING JP on September 13, 2024 and sell it today you would earn a total of  260.00  from holding CANON MARKETING JP or generate 9.09% 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 JP  vs.  MetLife

CANON MARKETING JP

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CANON MARKETING JP are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward-looking indicators, CANON MARKETING is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

MetLife

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MetLife are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MetLife reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CANON MARKETING and MetLife

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

The idea behind CANON MARKETING JP and MetLife 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.