Correlation Between Performance Food and Canon Marketing

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Can any of the company-specific risk be diversified away by investing in both Performance Food 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 Performance Food and Canon Marketing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Performance Food Group and Canon Marketing Japan, you can compare the effects of market volatilities on Performance Food 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 Performance Food with a short position of Canon Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and Canon Marketing.

Diversification Opportunities for Performance Food and Canon Marketing

PerformanceCanonDiversified AwayPerformanceCanonDiversified Away100%
0.36
  Correlation Coefficient

Weak diversification

The 3 months correlation between Performance and Canon is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group 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 Performance Food 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 Performance Food 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 Japan has no effect on the direction of Performance Food i.e., Performance Food and Canon Marketing go up and down completely randomly.

Pair Corralation between Performance Food and Canon Marketing

Assuming the 90 days trading horizon Performance Food is expected to generate 4.12 times less return on investment than Canon Marketing. But when comparing it to its historical volatility, Performance Food Group is 1.02 times less risky than Canon Marketing. It trades about 0.04 of its potential returns per unit of risk. Canon Marketing Japan is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2,920  in Canon Marketing Japan on November 15, 2024 and sell it today you would earn a total of  360.00  from holding Canon Marketing Japan or generate 12.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Performance Food Group  vs.  Canon Marketing Japan

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 51015
JavaScript chart by amCharts 3.21.15P5F CNJ
       Timeline  
Performance Food 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Performance Food Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Performance Food is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb7880828486
Canon Marketing Japan 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Canon Marketing Japan are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Canon Marketing reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb28.52929.53030.53131.53232.5

Performance Food and Canon Marketing Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.08-3.05-2.03-1.010.01711.022.083.134.195.24 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15P5F CNJ
       Returns  

Pair Trading with Performance Food and Canon Marketing

The main advantage of trading using opposite Performance Food and Canon Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food 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 Performance Food Group 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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