Correlation Between ORIX and Legend Holdings
Can any of the company-specific risk be diversified away by investing in both ORIX and Legend Holdings 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 ORIX and Legend Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ORIX Corporation and Legend Holdings, you can compare the effects of market volatilities on ORIX and Legend Holdings 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 ORIX with a short position of Legend Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORIX and Legend Holdings.
Diversification Opportunities for ORIX and Legend Holdings
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ORIX and Legend is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding ORIX Corp. and Legend Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legend Holdings and ORIX 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 ORIX Corporation are associated (or correlated) with Legend Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legend Holdings has no effect on the direction of ORIX i.e., ORIX and Legend Holdings go up and down completely randomly.
Pair Corralation between ORIX and Legend Holdings
Assuming the 90 days horizon ORIX Corporation is expected to under-perform the Legend Holdings. But the stock apears to be less risky and, when comparing its historical volatility, ORIX Corporation is 1.95 times less risky than Legend Holdings. The stock trades about -0.04 of its potential returns per unit of risk. The Legend Holdings is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 62.00 in Legend Holdings on September 2, 2024 and sell it today you would earn a total of 22.00 from holding Legend Holdings or generate 35.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ORIX Corp. vs. Legend Holdings
Performance |
| Timeline |
| ORIX |
| Legend Holdings |
ORIX and Legend Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORIX and Legend Holdings
The main advantage of trading using opposite ORIX and Legend Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORIX position performs unexpectedly, Legend Holdings 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 Legend Holdings will offset losses from the drop in Legend Holdings' long position.| ORIX vs. OURGAME INTHOLDL 00005 | ORIX vs. Autohome ADR | ORIX vs. ANGLER GAMING PLC | ORIX vs. Games Workshop Group |
| Legend Holdings vs. MI Homes | Legend Holdings vs. Addus HomeCare | Legend Holdings vs. ON SEMICONDUCTOR | Legend Holdings vs. Taylor Morrison Home |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |