Correlation Between Nine Dragons and ORIX
Can any of the company-specific risk be diversified away by investing in both Nine Dragons 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 Nine Dragons and ORIX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nine Dragons Paper and ORIX Corporation, you can compare the effects of market volatilities on Nine Dragons 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 Nine Dragons with a short position of ORIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Dragons and ORIX.
Diversification Opportunities for Nine Dragons and ORIX
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nine and ORIX is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Nine Dragons Paper and ORIX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORIX and Nine Dragons 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 Nine Dragons Paper 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 Nine Dragons i.e., Nine Dragons and ORIX go up and down completely randomly.
Pair Corralation between Nine Dragons and ORIX
Assuming the 90 days horizon Nine Dragons is expected to generate 4.37 times less return on investment than ORIX. In addition to that, Nine Dragons is 2.65 times more volatile than ORIX Corporation. It trades about 0.0 of its total potential returns per unit of risk. ORIX Corporation is currently generating about 0.04 per unit of volatility. 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nine Dragons Paper vs. ORIX Corp.
Performance |
| Timeline |
| Nine Dragons Paper |
| ORIX |
Nine Dragons and ORIX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Dragons and ORIX
The main advantage of trading using opposite Nine Dragons and ORIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Dragons 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.| Nine Dragons vs. METHODE ELECTRONICS | Nine Dragons vs. TYSON FOODS A | Nine Dragons vs. Nucletron Electronic Aktiengesellschaft | Nine Dragons vs. STMicroelectronics NV |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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