Correlation Between Aozora Bank and OptimumBank Holdings
Can any of the company-specific risk be diversified away by investing in both Aozora Bank and OptimumBank 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 Aozora Bank and OptimumBank Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aozora Bank and OptimumBank Holdings, you can compare the effects of market volatilities on Aozora Bank and OptimumBank 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 Aozora Bank with a short position of OptimumBank Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aozora Bank and OptimumBank Holdings.
Diversification Opportunities for Aozora Bank and OptimumBank Holdings
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aozora and OptimumBank is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Aozora Bank and OptimumBank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptimumBank Holdings 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 OptimumBank Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptimumBank Holdings has no effect on the direction of Aozora Bank i.e., Aozora Bank and OptimumBank Holdings go up and down completely randomly.
Pair Corralation between Aozora Bank and OptimumBank Holdings
If you would invest 329.00 in OptimumBank Holdings on September 14, 2024 and sell it today you would earn a total of 161.00 from holding OptimumBank Holdings or generate 48.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.37% |
| Values | Daily Returns |
Aozora Bank vs. OptimumBank Holdings
Performance |
| Timeline |
| Aozora Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| OptimumBank Holdings |
Aozora Bank and OptimumBank Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aozora Bank and OptimumBank Holdings
The main advantage of trading using opposite Aozora Bank and OptimumBank Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aozora Bank position performs unexpectedly, OptimumBank 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 OptimumBank Holdings will offset losses from the drop in OptimumBank Holdings' long position.| Aozora Bank vs. Brenmiller Energy Ltd | Aozora Bank vs. Patterson UTI Energy | Aozora Bank vs. Precision Drilling | Aozora Bank vs. Nabors Industries |
| OptimumBank Holdings vs. First National Bank | OptimumBank Holdings vs. TrustCo Bank Corp | OptimumBank Holdings vs. Inter Co Class | OptimumBank Holdings vs. Rhinebeck Bancorp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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