Correlation Between Crescent Star and ORIX Leasing
Can any of the company-specific risk be diversified away by investing in both Crescent Star and ORIX Leasing 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 Crescent Star and ORIX Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crescent Star Insurance and ORIX Leasing Pakistan, you can compare the effects of market volatilities on Crescent Star and ORIX Leasing 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 Crescent Star with a short position of ORIX Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent Star and ORIX Leasing.
Diversification Opportunities for Crescent Star and ORIX Leasing
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Crescent and ORIX is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Star Insurance and ORIX Leasing Pakistan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORIX Leasing Pakistan and Crescent Star 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 Crescent Star Insurance are associated (or correlated) with ORIX Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORIX Leasing Pakistan has no effect on the direction of Crescent Star i.e., Crescent Star and ORIX Leasing go up and down completely randomly.
Pair Corralation between Crescent Star and ORIX Leasing
Assuming the 90 days trading horizon Crescent Star is expected to generate 1.88 times less return on investment than ORIX Leasing. In addition to that, Crescent Star is 1.36 times more volatile than ORIX Leasing Pakistan. It trades about 0.07 of its total potential returns per unit of risk. ORIX Leasing Pakistan is currently generating about 0.17 per unit of volatility. If you would invest 2,949 in ORIX Leasing Pakistan on October 30, 2024 and sell it today you would earn a total of 734.00 from holding ORIX Leasing Pakistan or generate 24.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Crescent Star Insurance vs. ORIX Leasing Pakistan
Performance |
| Timeline |
| Crescent Star Insurance |
| ORIX Leasing Pakistan |
Crescent Star and ORIX Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent Star and ORIX Leasing
The main advantage of trading using opposite Crescent Star and ORIX Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent Star position performs unexpectedly, ORIX Leasing 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 Leasing will offset losses from the drop in ORIX Leasing's long position.| Crescent Star vs. Matco Foods | Crescent Star vs. Wah Nobel Chemicals | Crescent Star vs. Sardar Chemical Industries | Crescent Star vs. Fauji Foods |
| ORIX Leasing vs. Dost Steels | ORIX Leasing vs. Century Insurance | ORIX Leasing vs. Ghandhara Automobile | ORIX Leasing vs. Reliance Insurance Co |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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