Correlation Between Otsuka Information and Ma Kuang
Can any of the company-specific risk be diversified away by investing in both Otsuka Information and Ma Kuang 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 Ma Kuang 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 Ma Kuang Healthcare, you can compare the effects of market volatilities on Otsuka Information and Ma Kuang 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 Ma Kuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Otsuka Information and Ma Kuang.
Diversification Opportunities for Otsuka Information and Ma Kuang
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Otsuka and 4139 is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Otsuka Information Technology and Ma Kuang Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ma Kuang Healthcare 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 Ma Kuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ma Kuang Healthcare has no effect on the direction of Otsuka Information i.e., Otsuka Information and Ma Kuang go up and down completely randomly.
Pair Corralation between Otsuka Information and Ma Kuang
Assuming the 90 days trading horizon Otsuka Information Technology is expected to generate 2.87 times more return on investment than Ma Kuang. However, Otsuka Information is 2.87 times more volatile than Ma Kuang Healthcare. It trades about 0.12 of its potential returns per unit of risk. Ma Kuang Healthcare is currently generating about -0.01 per unit of risk. If you would invest 16,750 in Otsuka Information Technology on September 14, 2024 and sell it today you would earn a total of 1,100 from holding Otsuka Information Technology or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Otsuka Information Technology vs. Ma Kuang Healthcare
Performance |
| Timeline |
| Otsuka Information |
| Ma Kuang Healthcare |
Otsuka Information and Ma Kuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Otsuka Information and Ma Kuang
The main advantage of trading using opposite Otsuka Information and Ma Kuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Otsuka Information position performs unexpectedly, Ma Kuang 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 Ma Kuang will offset losses from the drop in Ma Kuang's 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 |
| Ma Kuang vs. Kedge Construction Co | Ma Kuang vs. MedFirst Healthcare Services | Ma Kuang vs. Pacific Construction Co | Ma Kuang vs. Ambassador Hotel |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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