Correlation Between Oriental Land and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both Oriental Land and Canlan Ice 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 Oriental Land and Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oriental Land Co and Canlan Ice Sports, you can compare the effects of market volatilities on Oriental Land and Canlan Ice 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 Oriental Land with a short position of Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Land and Canlan Ice.
Diversification Opportunities for Oriental Land and Canlan Ice
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oriental and Canlan is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Land Co and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports and Oriental Land 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 Oriental Land Co are associated (or correlated) with Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Oriental Land i.e., Oriental Land and Canlan Ice go up and down completely randomly.
Pair Corralation between Oriental Land and Canlan Ice
Assuming the 90 days horizon Oriental Land Co is expected to generate 124.74 times more return on investment than Canlan Ice. However, Oriental Land is 124.74 times more volatile than Canlan Ice Sports. It trades about 0.05 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.13 per unit of risk. If you would invest 4,070 in Oriental Land Co on September 12, 2024 and sell it today you would lose (1,755) from holding Oriental Land Co or give up 43.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 58.69% |
| Values | Daily Returns |
Oriental Land Co vs. Canlan Ice Sports
Performance |
| Timeline |
| Oriental Land |
| Canlan Ice Sports |
Oriental Land and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Land and Canlan Ice
The main advantage of trading using opposite Oriental Land and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Land position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| Oriental Land vs. Hasbro Inc | Oriental Land vs. Oriental Land Co | Oriental Land vs. Shin Etsu Chemical Co | Oriental Land vs. KDDI Corp |
| Canlan Ice vs. Oriental Land Co | Canlan Ice vs. Oriental Land Co | Canlan Ice vs. ANTA Sports Products | Canlan Ice vs. ANTA Sports Products |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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