Correlation Between VIVA WINE and CANON MARKETING

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

By analyzing existing cross correlation between VIVA WINE GROUP and CANON MARKETING JP, you can compare the effects of market volatilities on VIVA WINE 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 VIVA WINE with a short position of CANON MARKETING. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and CANON MARKETING.

Diversification Opportunities for VIVA WINE and CANON MARKETING

-0.65

Correlation Coefficient

VIVA WINE  CANON MARKETING

Excellent diversification

The 3 months correlation between VIVA and CANON is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP and CANON MARKETING JP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CANON MARKETING JP and VIVA WINE 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 VIVA WINE GROUP 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 JP has no effect on the direction of VIVA WINE i.e., VIVA WINE and CANON MARKETING go up and down completely randomly.

Pair Corralation between VIVA WINE and CANON MARKETING

Assuming the 90 days horizon VIVA WINE GROUP is expected to under-perform the CANON MARKETING. In addition to that, VIVA WINE is 1.47 times more volatile than CANON MARKETING JP. It trades about -0.18 of its total potential returns per unit of risk. CANON MARKETING JP is currently generating about 0.28 per unit of volatility. If you would invest  3,060  in CANON MARKETING JP on October 5, 2024 and sell it today you would earn a total of  140.00  from holding CANON MARKETING JP or generate 4.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.44%
Values	Daily Returns

VIVA WINE GROUP  vs.  CANON MARKETING JP

VIVA WINE GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VIVA WINE GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain 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.

CANON MARKETING JP

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CANON MARKETING JP are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward-looking indicators, CANON MARKETING unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VIVA WINE and CANON MARKETING

The main advantage of trading using opposite VIVA WINE and CANON MARKETING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIVA WINE 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 VIVA WINE GROUP and CANON MARKETING JP 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.