Correlation Between KSB Pumps and ORIX Leasing
Can any of the company-specific risk be diversified away by investing in both KSB Pumps 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 KSB Pumps and ORIX Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KSB Pumps and ORIX Leasing Pakistan, you can compare the effects of market volatilities on KSB Pumps 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 KSB Pumps with a short position of ORIX Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of KSB Pumps and ORIX Leasing.
Diversification Opportunities for KSB Pumps and ORIX Leasing
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KSB and ORIX is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding KSB Pumps 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 KSB Pumps 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 KSB Pumps 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 KSB Pumps i.e., KSB Pumps and ORIX Leasing go up and down completely randomly.
Pair Corralation between KSB Pumps and ORIX Leasing
Assuming the 90 days trading horizon KSB Pumps is expected to under-perform the ORIX Leasing. In addition to that, KSB Pumps is 1.09 times more volatile than ORIX Leasing Pakistan. It trades about -0.01 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 29, 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 | 100.0% |
| Values | Daily Returns |
KSB Pumps vs. ORIX Leasing Pakistan
Performance |
| Timeline |
| KSB Pumps |
| ORIX Leasing Pakistan |
KSB Pumps and ORIX Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KSB Pumps and ORIX Leasing
The main advantage of trading using opposite KSB Pumps and ORIX Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KSB Pumps 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.| KSB Pumps vs. Fateh Sports Wear | KSB Pumps vs. Pakistan Telecommunication | KSB Pumps vs. Pakistan Synthetics | KSB Pumps vs. Sitara Chemical Industries |
| ORIX Leasing vs. Murree Brewery | ORIX Leasing vs. Crescent Star Insurance | ORIX Leasing vs. IGI Life Insurance | ORIX Leasing vs. Pakistan Aluminium Beverage |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |