Correlation Between Canon Marketing and YASKAWA ELEC

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

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

Diversification Opportunities for Canon Marketing and YASKAWA ELEC

-0.26

Correlation Coefficient

Canon Marketing  YASKAWA ELEC

Very good diversification

The 3 months correlation between Canon and YASKAWA is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Canon Marketing Japan and YASKAWA ELEC UNSP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YASKAWA ELEC UNSP and Canon Marketing 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 Canon Marketing Japan are associated (or correlated) with YASKAWA ELEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YASKAWA ELEC UNSP has no effect on the direction of Canon Marketing i.e., Canon Marketing and YASKAWA ELEC go up and down completely randomly.

Pair Corralation between Canon Marketing and YASKAWA ELEC

Assuming the 90 days horizon Canon Marketing Japan is expected to generate 0.84 times more return on investment than YASKAWA ELEC. However, Canon Marketing Japan is 1.19 times less risky than YASKAWA ELEC. It trades about 0.04 of its potential returns per unit of risk. YASKAWA ELEC UNSP is currently generating about -0.12 per unit of risk. If you would invest  2,980  in Canon Marketing Japan on September 15, 2024 and sell it today you would earn a total of  100.00  from holding Canon Marketing Japan or generate 3.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Canon Marketing Japan  vs.  YASKAWA ELEC UNSP

Canon Marketing Japan

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Canon Marketing Japan are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

YASKAWA ELEC UNSP

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Canon Marketing and YASKAWA ELEC

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

The idea behind Canon Marketing Japan and YASKAWA ELEC UNSP 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.