Correlation Between FAST RETAIL and Canon Marketing
Can any of the company-specific risk be diversified away by investing in both FAST RETAIL 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 FAST RETAIL and Canon Marketing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FAST RETAIL ADR and Canon Marketing Japan, you can compare the effects of market volatilities on FAST RETAIL 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 FAST RETAIL with a short position of Canon Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and Canon Marketing.
Diversification Opportunities for FAST RETAIL and Canon Marketing
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FAST and Canon is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR 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 FAST RETAIL 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 FAST RETAIL ADR 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 FAST RETAIL i.e., FAST RETAIL and Canon Marketing go up and down completely randomly.
Pair Corralation between FAST RETAIL and Canon Marketing
Assuming the 90 days trading horizon FAST RETAIL ADR is expected to generate 1.34 times more return on investment than Canon Marketing. However, FAST RETAIL is 1.34 times more volatile than Canon Marketing Japan. It trades about 0.08 of its potential returns per unit of risk. Canon Marketing Japan is currently generating about 0.09 per unit of risk. If you would invest 2,920 in FAST RETAIL ADR on September 24, 2024 and sell it today you would earn a total of 260.00 from holding FAST RETAIL ADR or generate 8.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
FAST RETAIL ADR vs. Canon Marketing Japan
Performance |
Timeline |
FAST RETAIL ADR |
Canon Marketing Japan |
FAST RETAIL and Canon Marketing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FAST RETAIL and Canon Marketing
The main advantage of trading using opposite FAST RETAIL and Canon Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL 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.FAST RETAIL vs. DELTA AIR LINES | FAST RETAIL vs. Air New Zealand | FAST RETAIL vs. Playtech plc | FAST RETAIL vs. COLUMBIA SPORTSWEAR |
Canon Marketing vs. Canon Inc | Canon Marketing vs. Canon Inc | Canon Marketing vs. Ricoh Company | Canon Marketing vs. Brother Industries |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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