Correlation Between Holiday Entertainment and Otsuka Information
Can any of the company-specific risk be diversified away by investing in both Holiday Entertainment and Otsuka Information 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 Holiday Entertainment and Otsuka Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holiday Entertainment Co and Otsuka Information Technology, you can compare the effects of market volatilities on Holiday Entertainment and Otsuka Information 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 Holiday Entertainment with a short position of Otsuka Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holiday Entertainment and Otsuka Information.
Diversification Opportunities for Holiday Entertainment and Otsuka Information
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Holiday and Otsuka is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Holiday Entertainment Co and Otsuka Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otsuka Information and Holiday Entertainment 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 Holiday Entertainment Co are associated (or correlated) with Otsuka Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otsuka Information has no effect on the direction of Holiday Entertainment i.e., Holiday Entertainment and Otsuka Information go up and down completely randomly.
Pair Corralation between Holiday Entertainment and Otsuka Information
Assuming the 90 days trading horizon Holiday Entertainment Co is expected to generate 0.21 times more return on investment than Otsuka Information. However, Holiday Entertainment Co is 4.77 times less risky than Otsuka Information. It trades about -0.29 of its potential returns per unit of risk. Otsuka Information Technology is currently generating about -0.08 per unit of risk. If you would invest 7,910 in Holiday Entertainment Co on October 24, 2024 and sell it today you would lose (220.00) from holding Holiday Entertainment Co or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Holiday Entertainment Co vs. Otsuka Information Technology
Performance |
| Timeline |
| Holiday Entertainment |
| Otsuka Information |
Holiday Entertainment and Otsuka Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holiday Entertainment and Otsuka Information
The main advantage of trading using opposite Holiday Entertainment and Otsuka Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holiday Entertainment position performs unexpectedly, Otsuka Information 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 Otsuka Information will offset losses from the drop in Otsuka Information's long position.| Holiday Entertainment vs. Yulon Finance Corp | Holiday Entertainment vs. Taiwan Secom Co | Holiday Entertainment vs. Taiwan Shin Kong | Holiday Entertainment vs. Formosa International Hotels |
| Otsuka Information vs. Pacific Construction Co | Otsuka Information vs. FarGlory Hotel Co | Otsuka Information vs. Highwealth Construction Corp | Otsuka Information vs. New Asia Construction |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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