Correlation Between Otsuka Information and WPG Holdings
Can any of the company-specific risk be diversified away by investing in both Otsuka Information and WPG Holdings 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 Otsuka Information and WPG Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Otsuka Information Technology and WPG Holdings, you can compare the effects of market volatilities on Otsuka Information and WPG Holdings 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 Otsuka Information with a short position of WPG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Otsuka Information and WPG Holdings.
Diversification Opportunities for Otsuka Information and WPG Holdings
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Otsuka and WPG is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Otsuka Information Technology and WPG Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WPG Holdings and Otsuka Information 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 Otsuka Information Technology are associated (or correlated) with WPG Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WPG Holdings has no effect on the direction of Otsuka Information i.e., Otsuka Information and WPG Holdings go up and down completely randomly.
Pair Corralation between Otsuka Information and WPG Holdings
Assuming the 90 days trading horizon Otsuka Information Technology is expected to generate 4.35 times more return on investment than WPG Holdings. However, Otsuka Information is 4.35 times more volatile than WPG Holdings. It trades about 0.06 of its potential returns per unit of risk. WPG Holdings is currently generating about 0.14 per unit of risk. If you would invest 14,197 in Otsuka Information Technology on September 14, 2024 and sell it today you would earn a total of 3,653 from holding Otsuka Information Technology or generate 25.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Otsuka Information Technology vs. WPG Holdings
Performance |
| Timeline |
| Otsuka Information |
| WPG Holdings |
Otsuka Information and WPG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Otsuka Information and WPG Holdings
The main advantage of trading using opposite Otsuka Information and WPG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Otsuka Information position performs unexpectedly, WPG Holdings 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 WPG Holdings will offset losses from the drop in WPG Holdings' long position.| Otsuka Information vs. Ma Kuang Healthcare | Otsuka Information vs. Data International Co | Otsuka Information vs. Jia Jie Biomedical | Otsuka Information vs. Power Wind Health |
| WPG Holdings vs. Galaxy Software Services | WPG Holdings vs. IBF Financial Holdings | WPG Holdings vs. Kinsus Interconnect Technology | WPG Holdings vs. Asmedia Technology |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Commodity Directory Find actively traded commodities issued by global exchanges |