Correlation Between Canon and ACHETER-LOUER

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

By analyzing existing cross correlation between Canon Inc and ACHETER LOUER EO 145612, you can compare the effects of market volatilities on Canon and ACHETER-LOUER 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 with a short position of ACHETER-LOUER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canon and ACHETER-LOUER.

Diversification Opportunities for Canon and ACHETER-LOUER

-0.51

Correlation Coefficient

Canon  ACHETER-LOUER

Excellent diversification

The 3 months correlation between Canon and ACHETER-LOUER is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Canon Inc and ACHETER LOUER EO 145612 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACHETER LOUER EO and Canon 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 Inc are associated (or correlated) with ACHETER-LOUER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACHETER LOUER EO has no effect on the direction of Canon i.e., Canon and ACHETER-LOUER go up and down completely randomly.

Pair Corralation between Canon and ACHETER-LOUER

Assuming the 90 days trading horizon Canon Inc is expected to generate 0.1 times more return on investment than ACHETER-LOUER. However, Canon Inc is 9.94 times less risky than ACHETER-LOUER. It trades about -0.01 of its potential returns per unit of risk. ACHETER LOUER EO 145612 is currently generating about -0.08 per unit of risk. If you would invest  3,154  in Canon Inc on September 25, 2024 and sell it today you would lose (13.00) from holding Canon Inc or give up 0.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Canon Inc  vs.  ACHETER LOUER EO 145612

Canon Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Canon Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Canon may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ACHETER LOUER EO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ACHETER LOUER EO 145612 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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Canon and ACHETER-LOUER

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

The idea behind Canon Inc and ACHETER LOUER EO 145612 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.