Correlation Between Logitech International and Canon

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

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

Diversification Opportunities for Logitech International and Canon

0.59

Correlation Coefficient

Logitech International  Canon

Very weak diversification

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

Pair Corralation between Logitech International and Canon

Given the investment horizon of 90 days Logitech International SA is expected to generate 0.68 times more return on investment than Canon. However, Logitech International SA is 1.48 times less risky than Canon. It trades about 0.1 of its potential returns per unit of risk. Canon Inc is currently generating about 0.0 per unit of risk. If you would invest  8,284  in Logitech International SA on December 21, 2024 and sell it today you would earn a total of  803.00  from holding Logitech International SA or generate 9.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	86.67%
Values	Daily Returns

Logitech International SA  vs.  Canon Inc

Logitech International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Logitech International SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Logitech International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Canon Inc

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Logitech International and Canon

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

The idea behind Logitech International SA and Canon Inc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.