Correlation Between Tradegate and CANON MARKETING

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

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

Diversification Opportunities for Tradegate and CANON MARKETING

-0.44

Correlation Coefficient

Tradegate  CANON MARKETING

Very good diversification

The 3 months correlation between Tradegate and CANON is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Tradegate AG Wertpapierhandels 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 Tradegate 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 Tradegate AG Wertpapierhandelsbank 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 Tradegate i.e., Tradegate and CANON MARKETING go up and down completely randomly.

Pair Corralation between Tradegate and CANON MARKETING

Assuming the 90 days horizon Tradegate AG Wertpapierhandelsbank is expected to under-perform the CANON MARKETING. But the stock apears to be less risky and, when comparing its historical volatility, Tradegate AG Wertpapierhandelsbank is 4.46 times less risky than CANON MARKETING. The stock trades about -0.12 of its potential returns per unit of risk. The CANON MARKETING JP is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  3,120  in CANON MARKETING JP on December 23, 2024 and sell it today you would earn a total of  60.00  from holding CANON MARKETING JP or generate 1.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Tradegate AG Wertpapierhandels  vs.  CANON MARKETING JP

Tradegate AG Wertpap

Risk-Adjusted Performance

Very Weak

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

CANON MARKETING JP

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CANON MARKETING JP are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward-looking indicators, CANON MARKETING is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Tradegate and CANON MARKETING

The main advantage of trading using opposite Tradegate and CANON MARKETING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradegate 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 Tradegate AG Wertpapierhandelsbank 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.