Correlation Between IGI Life and ORIX Leasing
Can any of the company-specific risk be diversified away by investing in both IGI Life 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 IGI Life and ORIX Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGI Life Insurance and ORIX Leasing Pakistan, you can compare the effects of market volatilities on IGI Life 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 IGI Life with a short position of ORIX Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGI Life and ORIX Leasing.
Diversification Opportunities for IGI Life and ORIX Leasing
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IGI and ORIX is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding IGI Life 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 IGI Life 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 IGI Life 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 IGI Life i.e., IGI Life and ORIX Leasing go up and down completely randomly.
Pair Corralation between IGI Life and ORIX Leasing
Assuming the 90 days trading horizon IGI Life Insurance is expected to under-perform the ORIX Leasing. In addition to that, IGI Life is 1.41 times more volatile than ORIX Leasing Pakistan. It trades about -0.24 of its total potential returns per unit of risk. ORIX Leasing Pakistan is currently generating about 0.06 per unit of volatility. If you would invest 3,602 in ORIX Leasing Pakistan on October 30, 2024 and sell it today you would earn a total of 81.00 from holding ORIX Leasing Pakistan or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.0% |
| Values | Daily Returns |
IGI Life Insurance vs. ORIX Leasing Pakistan
Performance |
| Timeline |
| IGI Life Insurance |
| ORIX Leasing Pakistan |
IGI Life and ORIX Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGI Life and ORIX Leasing
The main advantage of trading using opposite IGI Life and ORIX Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGI Life 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.| IGI Life vs. Metropolitan Steel Corp | IGI Life vs. JS Bank | IGI Life vs. Amreli Steels | IGI Life vs. Apna Microfinance Bank |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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