Correlation Between Oji Holdings and Nine Dragons
Can any of the company-specific risk be diversified away by investing in both Oji Holdings and Nine Dragons 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 Oji Holdings and Nine Dragons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oji Holdings Corp and Nine Dragons Paper, you can compare the effects of market volatilities on Oji Holdings and Nine Dragons 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 Oji Holdings with a short position of Nine Dragons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oji Holdings and Nine Dragons.
Diversification Opportunities for Oji Holdings and Nine Dragons
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oji and Nine is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Oji Holdings Corp and Nine Dragons Paper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Dragons Paper and Oji Holdings 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 Oji Holdings Corp are associated (or correlated) with Nine Dragons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Dragons Paper has no effect on the direction of Oji Holdings i.e., Oji Holdings and Nine Dragons go up and down completely randomly.
Pair Corralation between Oji Holdings and Nine Dragons
Assuming the 90 days horizon Oji Holdings Corp is expected to generate 10.73 times more return on investment than Nine Dragons. However, Oji Holdings is 10.73 times more volatile than Nine Dragons Paper. It trades about 0.17 of its potential returns per unit of risk. Nine Dragons Paper is currently generating about -0.33 per unit of risk. If you would invest 3,396 in Oji Holdings Corp on October 25, 2024 and sell it today you would earn a total of 644.00 from holding Oji Holdings Corp or generate 18.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Oji Holdings Corp vs. Nine Dragons Paper
Performance |
| Timeline |
| Oji Holdings Corp |
| Nine Dragons Paper |
Oji Holdings and Nine Dragons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oji Holdings and Nine Dragons
The main advantage of trading using opposite Oji Holdings and Nine Dragons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oji Holdings position performs unexpectedly, Nine Dragons 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 Nine Dragons will offset losses from the drop in Nine Dragons' long position.| Oji Holdings vs. BillerudKorsns AB | Oji Holdings vs. Nine Dragons Paper | Oji Holdings vs. Nine Dragons Paper | Oji Holdings vs. Canfor Pulp Products |
| Nine Dragons vs. Canfor Pulp Products | Nine Dragons vs. Mondi PLC ADR | Nine Dragons vs. Nine Dragons Paper | Nine Dragons vs. Klabin Sa A |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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