Correlation Between BANDAI NAMCO and Oriental Land
Can any of the company-specific risk be diversified away by investing in both BANDAI NAMCO and Oriental Land 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 BANDAI NAMCO and Oriental Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANDAI NAMCO Holdings and Oriental Land Co, you can compare the effects of market volatilities on BANDAI NAMCO and Oriental Land 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 BANDAI NAMCO with a short position of Oriental Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANDAI NAMCO and Oriental Land.
Diversification Opportunities for BANDAI NAMCO and Oriental Land
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BANDAI and Oriental is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding BANDAI NAMCO Holdings and Oriental Land Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Land and BANDAI NAMCO 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 BANDAI NAMCO Holdings are associated (or correlated) with Oriental Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Land has no effect on the direction of BANDAI NAMCO i.e., BANDAI NAMCO and Oriental Land go up and down completely randomly.
Pair Corralation between BANDAI NAMCO and Oriental Land
Assuming the 90 days horizon BANDAI NAMCO Holdings is expected to generate 1.23 times more return on investment than Oriental Land. However, BANDAI NAMCO is 1.23 times more volatile than Oriental Land Co. It trades about 0.0 of its potential returns per unit of risk. Oriental Land Co is currently generating about -0.1 per unit of risk. If you would invest 1,069 in BANDAI NAMCO Holdings on September 3, 2024 and sell it today you would lose (15.00) from holding BANDAI NAMCO Holdings or give up 1.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANDAI NAMCO Holdings vs. Oriental Land Co
Performance |
| Timeline |
| BANDAI NAMCO Holdings |
| Oriental Land |
BANDAI NAMCO and Oriental Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANDAI NAMCO and Oriental Land
The main advantage of trading using opposite BANDAI NAMCO and Oriental Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANDAI NAMCO position performs unexpectedly, Oriental Land 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 Oriental Land will offset losses from the drop in Oriental Land's long position.| BANDAI NAMCO vs. Shimano Inc ADR | BANDAI NAMCO vs. Hasbro Inc | BANDAI NAMCO vs. YETI Holdings | BANDAI NAMCO vs. Shimano |
| Oriental Land vs. Mattel Inc | Oriental Land vs. Funko Inc | Oriental Land vs. JAKKS Pacific | Oriental Land vs. Madison Square Garden |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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