Correlation Between Canon Marketing and AIR PRODCHEMICALS

Can any of the company-specific risk be diversified away by investing in both Canon Marketing and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS, you can compare the effects of market volatilities on Canon Marketing and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canon Marketing and AIR PRODCHEMICALS.

Diversification Opportunities for Canon Marketing and AIR PRODCHEMICALS

0.29

Correlation Coefficient

Canon Marketing  AIR PRODCHEMICALS

Modest diversification

The 3 months correlation between Canon and AIR is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Canon Marketing Japan and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of Canon Marketing i.e., Canon Marketing and AIR PRODCHEMICALS go up and down completely randomly.

Pair Corralation between Canon Marketing and AIR PRODCHEMICALS

Assuming the 90 days horizon Canon Marketing Japan is expected to generate 0.65 times more return on investment than AIR PRODCHEMICALS. However, Canon Marketing Japan is 1.54 times less risky than AIR PRODCHEMICALS. It trades about 0.01 of its potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about -0.05 per unit of risk. If you would invest  3,140  in Canon Marketing Japan on March 30, 2025 and sell it today you would earn a total of  20.00  from holding Canon Marketing Japan or generate 0.64% return on investment over 90 days.

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

Canon Marketing Japan  vs.  AIR PRODCHEMICALS

Canon Marketing Japan

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Canon Marketing Japan are ranked lower than 1 (%) 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.

AIR PRODCHEMICALS

Risk-Adjusted Performance

Very Weak

Over the last 90 days AIR PRODCHEMICALS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Canon Marketing and AIR PRODCHEMICALS

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

The idea behind Canon Marketing Japan and AIR PRODCHEMICALS 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.