Correlation Between CANON MARKETING and Seaboard

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

Diversification Opportunities for CANON MARKETING and Seaboard

-0.59

Correlation Coefficient

CANON MARKETING  Seaboard

Excellent diversification

The 3 months correlation between CANON and Seaboard is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding CANON MARKETING JP and Seaboard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seaboard 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 Seaboard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seaboard has no effect on the direction of CANON MARKETING i.e., CANON MARKETING and Seaboard go up and down completely randomly.

Pair Corralation between CANON MARKETING and Seaboard

Assuming the 90 days trading horizon CANON MARKETING JP is expected to generate 1.1 times more return on investment than Seaboard. However, CANON MARKETING is 1.1 times more volatile than Seaboard. It trades about 0.07 of its potential returns per unit of risk. Seaboard is currently generating about -0.06 per unit of risk. If you would invest  2,000  in CANON MARKETING JP on October 4, 2024 and sell it today you would earn a total of  1,180  from holding CANON MARKETING JP or generate 59.0% return on investment over 90 days.

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

CANON MARKETING JP  vs.  Seaboard

CANON MARKETING JP

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CANON MARKETING JP are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward-looking indicators, CANON MARKETING may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Seaboard

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seaboard has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with CANON MARKETING and Seaboard

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

The idea behind CANON MARKETING JP and Seaboard 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.