Correlation Between National Bank and ORIX Leasing
Can any of the company-specific risk be diversified away by investing in both National Bank 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 National Bank and ORIX Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank of and ORIX Leasing Pakistan, you can compare the effects of market volatilities on National Bank 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 National Bank with a short position of ORIX Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and ORIX Leasing.
Diversification Opportunities for National Bank and ORIX Leasing
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and ORIX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of 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 National Bank 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 National Bank of 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 National Bank i.e., National Bank and ORIX Leasing go up and down completely randomly.
Pair Corralation between National Bank and ORIX Leasing
Assuming the 90 days trading horizon National Bank of is expected to generate 1.52 times more return on investment than ORIX Leasing. However, National Bank is 1.52 times more volatile than ORIX Leasing Pakistan. It trades about 0.03 of its potential returns per unit of risk. ORIX Leasing Pakistan is currently generating about -0.13 per unit of risk. If you would invest 6,128 in National Bank of on October 22, 2024 and sell it today you would earn a total of 59.00 from holding National Bank of or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. ORIX Leasing Pakistan
Performance |
| Timeline |
| National Bank |
| ORIX Leasing Pakistan |
National Bank and ORIX Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and ORIX Leasing
The main advantage of trading using opposite National Bank and ORIX Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank 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.| National Bank vs. Habib Bank | National Bank vs. United Bank | National Bank vs. MCB Bank | National Bank vs. Allied Bank |
| ORIX Leasing vs. Habib Bank | ORIX Leasing vs. National Bank of | ORIX Leasing vs. United Bank | ORIX Leasing vs. MCB 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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