Correlation Between ORIX and WW Grainger
Can any of the company-specific risk be diversified away by investing in both ORIX and WW Grainger 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 WW Grainger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ORIX Corporation and WW Grainger, you can compare the effects of market volatilities on ORIX and WW Grainger 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 WW Grainger. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORIX and WW Grainger.
Diversification Opportunities for ORIX and WW Grainger
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ORIX and GWW is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding ORIX Corp. and WW Grainger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WW Grainger 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 WW Grainger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WW Grainger has no effect on the direction of ORIX i.e., ORIX and WW Grainger go up and down completely randomly.
Pair Corralation between ORIX and WW Grainger
Assuming the 90 days horizon ORIX is expected to generate 4.49 times less return on investment than WW Grainger. In addition to that, ORIX is 1.52 times more volatile than WW Grainger. It trades about 0.02 of its total potential returns per unit of risk. WW Grainger is currently generating about 0.17 per unit of volatility. If you would invest 83,132 in WW Grainger on August 28, 2024 and sell it today you would earn a total of 31,668 from holding WW Grainger or generate 38.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
ORIX Corp. vs. WW Grainger
Performance |
| Timeline |
| ORIX |
| WW Grainger |
ORIX and WW Grainger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORIX and WW Grainger
The main advantage of trading using opposite ORIX and WW Grainger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORIX position performs unexpectedly, WW Grainger 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 WW Grainger will offset losses from the drop in WW Grainger's long position.| ORIX vs. Superior Plus Corp | ORIX vs. NMI Holdings | ORIX vs. Origin Agritech | ORIX vs. SIVERS SEMICONDUCTORS AB |
| WW Grainger vs. Superior Plus Corp | WW Grainger vs. NMI Holdings | WW Grainger vs. Origin Agritech | WW Grainger vs. SIVERS SEMICONDUCTORS AB |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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