Correlation Between Aozora Bank and OAKTRSPECLENDNEW
Can any of the company-specific risk be diversified away by investing in both Aozora Bank and OAKTRSPECLENDNEW 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 Aozora Bank and OAKTRSPECLENDNEW into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aozora Bank and OAKTRSPECLENDNEW, you can compare the effects of market volatilities on Aozora Bank and OAKTRSPECLENDNEW 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 Aozora Bank with a short position of OAKTRSPECLENDNEW. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aozora Bank and OAKTRSPECLENDNEW.
Diversification Opportunities for Aozora Bank and OAKTRSPECLENDNEW
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aozora and OAKTRSPECLENDNEW is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Aozora Bank and OAKTRSPECLENDNEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OAKTRSPECLENDNEW and Aozora Bank 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 Aozora Bank are associated (or correlated) with OAKTRSPECLENDNEW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OAKTRSPECLENDNEW has no effect on the direction of Aozora Bank i.e., Aozora Bank and OAKTRSPECLENDNEW go up and down completely randomly.
Pair Corralation between Aozora Bank and OAKTRSPECLENDNEW
Assuming the 90 days horizon Aozora Bank is expected to under-perform the OAKTRSPECLENDNEW. In addition to that, Aozora Bank is 1.45 times more volatile than OAKTRSPECLENDNEW. It trades about 0.0 of its total potential returns per unit of risk. OAKTRSPECLENDNEW is currently generating about 0.0 per unit of volatility. If you would invest 1,566 in OAKTRSPECLENDNEW on September 4, 2024 and sell it today you would lose (40.00) from holding OAKTRSPECLENDNEW or give up 2.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aozora Bank vs. OAKTRSPECLENDNEW
Performance |
| Timeline |
| Aozora Bank |
| OAKTRSPECLENDNEW |
Aozora Bank and OAKTRSPECLENDNEW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aozora Bank and OAKTRSPECLENDNEW
The main advantage of trading using opposite Aozora Bank and OAKTRSPECLENDNEW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aozora Bank position performs unexpectedly, OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW will offset losses from the drop in OAKTRSPECLENDNEW's long position.The idea behind Aozora Bank and OAKTRSPECLENDNEW 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.| OAKTRSPECLENDNEW vs. Apple Inc | OAKTRSPECLENDNEW vs. Apple Inc | OAKTRSPECLENDNEW vs. Apple Inc | OAKTRSPECLENDNEW vs. Apple Inc |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |