Correlation Between Canon and Sharp

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

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

Diversification Opportunities for Canon and Sharp

0.53

Correlation Coefficient

Canon  Sharp

Very weak diversification

The 3 months correlation between Canon and Sharp is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Canon Inc and Sharp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharp and Canon 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 Inc are associated (or correlated) with Sharp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharp has no effect on the direction of Canon i.e., Canon and Sharp go up and down completely randomly.

Pair Corralation between Canon and Sharp

Assuming the 90 days horizon Canon Inc is expected to generate 1.98 times more return on investment than Sharp. However, Canon is 1.98 times more volatile than Sharp. It trades about 0.04 of its potential returns per unit of risk. Sharp is currently generating about -0.02 per unit of risk. If you would invest  2,263  in Canon Inc on May 3, 2025 and sell it today you would earn a total of  569.00  from holding Canon Inc or generate 25.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	60.53%
Values	Daily Returns

Canon Inc  vs.  Sharp

Canon Inc

Risk-Adjusted Performance

Very Weak

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

Sharp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Canon and Sharp

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

The idea behind Canon Inc and Sharp 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.

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 Stocks Directory module to find actively traded stocks across global markets.