Correlation Between MaxLinear and Canon Marketing

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

By analyzing existing cross correlation between MaxLinear and Canon Marketing Japan, you can compare the effects of market volatilities on MaxLinear and Canon Marketing 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 MaxLinear with a short position of Canon Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of MaxLinear and Canon Marketing.

Diversification Opportunities for MaxLinear and Canon Marketing

-0.53

Correlation Coefficient

MaxLinear  Canon Marketing

Excellent diversification

The 3 months correlation between MaxLinear and Canon is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding MaxLinear and Canon Marketing Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Marketing Japan and MaxLinear 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 MaxLinear are associated (or correlated) with Canon Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Marketing Japan has no effect on the direction of MaxLinear i.e., MaxLinear and Canon Marketing go up and down completely randomly.

Pair Corralation between MaxLinear and Canon Marketing

Assuming the 90 days horizon MaxLinear is expected to under-perform the Canon Marketing. In addition to that, MaxLinear is 4.68 times more volatile than Canon Marketing Japan. It trades about -0.11 of its total potential returns per unit of risk. Canon Marketing Japan is currently generating about -0.04 per unit of volatility. If you would invest  3,100  in Canon Marketing Japan on December 21, 2024 and sell it today you would lose (100.00) from holding Canon Marketing Japan or give up 3.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

MaxLinear  vs.  Canon Marketing Japan

MaxLinear

Risk-Adjusted Performance

Very Weak

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

Canon Marketing Japan

Risk-Adjusted Performance

Very Weak

Over the last 90 days Canon Marketing Japan has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Canon Marketing is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MaxLinear and Canon Marketing

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

The idea behind MaxLinear and Canon Marketing Japan 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.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.