Correlation Between ORIX and PAX GLOBAL
Can any of the company-specific risk be diversified away by investing in both ORIX and PAX GLOBAL 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 PAX GLOBAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ORIX Corporation and PAX GLOBAL TECH, you can compare the effects of market volatilities on ORIX and PAX GLOBAL 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 PAX GLOBAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORIX and PAX GLOBAL.
Diversification Opportunities for ORIX and PAX GLOBAL
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ORIX and PAX is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding ORIX Corp. and PAX GLOBAL TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAX GLOBAL TECH 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 PAX GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAX GLOBAL TECH has no effect on the direction of ORIX i.e., ORIX and PAX GLOBAL go up and down completely randomly.
Pair Corralation between ORIX and PAX GLOBAL
Assuming the 90 days horizon ORIX is expected to generate 5.33 times less return on investment than PAX GLOBAL. But when comparing it to its historical volatility, ORIX Corporation is 3.08 times less risky than PAX GLOBAL. It trades about 0.05 of its potential returns per unit of risk. PAX GLOBAL TECH is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 23.00 in PAX GLOBAL TECH on September 3, 2024 and sell it today you would earn a total of 40.00 from holding PAX GLOBAL TECH or generate 173.91% 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. PAX GLOBAL TECH
Performance |
| Timeline |
| ORIX |
| PAX GLOBAL TECH |
ORIX and PAX GLOBAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORIX and PAX GLOBAL
The main advantage of trading using opposite ORIX and PAX GLOBAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORIX position performs unexpectedly, PAX GLOBAL 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 PAX GLOBAL will offset losses from the drop in PAX GLOBAL's long position.| ORIX vs. Perseus Mining Limited | ORIX vs. PennyMac Mortgage Investment | ORIX vs. Japan Asia Investment | ORIX vs. MGIC INVESTMENT |
| PAX GLOBAL vs. National Health Investors | PAX GLOBAL vs. SMA Solar Technology | PAX GLOBAL vs. Waste Management | PAX GLOBAL vs. CEOTRONICS |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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