Correlation Between Western Copper and Oriental Land
Can any of the company-specific risk be diversified away by investing in both Western Copper and Oriental Land 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 Western Copper and Oriental Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Copper and and Oriental Land Co, you can compare the effects of market volatilities on Western Copper and Oriental Land 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 Western Copper with a short position of Oriental Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Oriental Land.
Diversification Opportunities for Western Copper and Oriental Land
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and Oriental is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Oriental Land Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Land and Western Copper 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 Western Copper and are associated (or correlated) with Oriental Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Land has no effect on the direction of Western Copper i.e., Western Copper and Oriental Land go up and down completely randomly.
Pair Corralation between Western Copper and Oriental Land
Assuming the 90 days trading horizon Western Copper and is expected to under-perform the Oriental Land. In addition to that, Western Copper is 1.25 times more volatile than Oriental Land Co. It trades about -0.13 of its total potential returns per unit of risk. Oriental Land Co is currently generating about 0.08 per unit of volatility. If you would invest 2,080 in Oriental Land Co on November 6, 2024 and sell it today you would earn a total of 60.00 from holding Oriental Land Co or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. Oriental Land Co
Performance |
| Timeline |
| Western Copper |
| Oriental Land |
Western Copper and Oriental Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Oriental Land
The main advantage of trading using opposite Western Copper and Oriental Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, Oriental Land 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 Oriental Land will offset losses from the drop in Oriental Land's long position.| Western Copper vs. MOLSON RS BEVERAGE | Western Copper vs. THAI BEVERAGE | Western Copper vs. ATOSS SOFTWARE | Western Copper vs. Monster Beverage Corp |
| Oriental Land vs. CHRYSALIS INVESTMENTS LTD | Oriental Land vs. REINET INVESTMENTS SCA | Oriental Land vs. RYANAIR HLDGS ADR | Oriental Land vs. Luckin Coffee |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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