Correlation Between BANK CENTRAL and ORIX
Can any of the company-specific risk be diversified away by investing in both BANK CENTRAL and ORIX 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 BANK CENTRAL and ORIX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK CENTRAL ASIA and ORIX Corporation, you can compare the effects of market volatilities on BANK CENTRAL and ORIX 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 BANK CENTRAL with a short position of ORIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK CENTRAL and ORIX.
Diversification Opportunities for BANK CENTRAL and ORIX
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and ORIX is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding BANK CENTRAL ASIA and ORIX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORIX and BANK CENTRAL 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 BANK CENTRAL ASIA are associated (or correlated) with ORIX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORIX has no effect on the direction of BANK CENTRAL i.e., BANK CENTRAL and ORIX go up and down completely randomly.
Pair Corralation between BANK CENTRAL and ORIX
Assuming the 90 days trading horizon BANK CENTRAL is expected to generate 3.85 times less return on investment than ORIX. But when comparing it to its historical volatility, BANK CENTRAL ASIA is 1.51 times less risky than ORIX. It trades about 0.02 of its potential returns per unit of risk. ORIX Corporation is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,610 in ORIX Corporation on August 31, 2024 and sell it today you would earn a total of 450.00 from holding ORIX Corporation or generate 27.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
BANK CENTRAL ASIA vs. ORIX Corp.
Performance |
| Timeline |
| BANK CENTRAL ASIA |
| ORIX |
BANK CENTRAL and ORIX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK CENTRAL and ORIX
The main advantage of trading using opposite BANK CENTRAL and ORIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK CENTRAL position performs unexpectedly, ORIX 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 ORIX will offset losses from the drop in ORIX's long position.| BANK CENTRAL vs. Burlington Stores | BANK CENTRAL vs. VIRG NATL BANKSH | BANK CENTRAL vs. CDN IMPERIAL BANK | BANK CENTRAL vs. CHIBA BANK |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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