Correlation Between ORIX and HORNBACH Baumarkt
Can any of the company-specific risk be diversified away by investing in both ORIX and HORNBACH Baumarkt 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 HORNBACH Baumarkt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ORIX Corporation and HORNBACH Baumarkt AG, you can compare the effects of market volatilities on ORIX and HORNBACH Baumarkt 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 HORNBACH Baumarkt. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORIX and HORNBACH Baumarkt.
Diversification Opportunities for ORIX and HORNBACH Baumarkt
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ORIX and HORNBACH is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding ORIX Corp. and HORNBACH Baumarkt AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HORNBACH Baumarkt 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 HORNBACH Baumarkt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HORNBACH Baumarkt has no effect on the direction of ORIX i.e., ORIX and HORNBACH Baumarkt go up and down completely randomly.
Pair Corralation between ORIX and HORNBACH Baumarkt
Assuming the 90 days horizon ORIX Corporation is expected to generate 1.19 times more return on investment than HORNBACH Baumarkt. However, ORIX is 1.19 times more volatile than HORNBACH Baumarkt AG. It trades about 0.2 of its potential returns per unit of risk. HORNBACH Baumarkt AG is currently generating about -0.01 per unit of risk. If you would invest 1,910 in ORIX Corporation on September 1, 2024 and sell it today you would earn a total of 190.00 from holding ORIX Corporation or generate 9.95% 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. HORNBACH Baumarkt AG
Performance |
| Timeline |
| ORIX |
| HORNBACH Baumarkt |
ORIX and HORNBACH Baumarkt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORIX and HORNBACH Baumarkt
The main advantage of trading using opposite ORIX and HORNBACH Baumarkt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORIX position performs unexpectedly, HORNBACH Baumarkt 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 HORNBACH Baumarkt will offset losses from the drop in HORNBACH Baumarkt's long position.| ORIX vs. AM EAGLE OUTFITTERS | ORIX vs. Ribbon Communications | ORIX vs. Chunghwa Telecom Co | ORIX vs. Uber Technologies |
| HORNBACH Baumarkt vs. Laureate Education | HORNBACH Baumarkt vs. Jacquet Metal Service | HORNBACH Baumarkt vs. TAL Education Group | HORNBACH Baumarkt vs. ATRYS HEALTH SA |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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