Correlation Between Oriental Land and Li Ning
Can any of the company-specific risk be diversified away by investing in both Oriental Land and Li Ning 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 Li Ning 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 Li Ning Company, you can compare the effects of market volatilities on Oriental Land and Li Ning 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 Li Ning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Land and Li Ning.
Diversification Opportunities for Oriental Land and Li Ning
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oriental and LNNGF is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Land Co and Li Ning Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Li Ning Company 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 Li Ning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Li Ning Company has no effect on the direction of Oriental Land i.e., Oriental Land and Li Ning go up and down completely randomly.
Pair Corralation between Oriental Land and Li Ning
Assuming the 90 days horizon Oriental Land Co is expected to under-perform the Li Ning. But the pink sheet apears to be less risky and, when comparing its historical volatility, Oriental Land Co is 1.23 times less risky than Li Ning. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Li Ning Company is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 233.00 in Li Ning Company on September 22, 2024 and sell it today you would earn a total of 7.00 from holding Li Ning Company or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Oriental Land Co vs. Li Ning Company
Performance |
| Timeline |
| Oriental Land |
| Li Ning Company |
Oriental Land and Li Ning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Land and Li Ning
The main advantage of trading using opposite Oriental Land and Li Ning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Land position performs unexpectedly, Li Ning 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 Li Ning will offset losses from the drop in Li Ning's long position.| Oriental Land vs. Watsco Inc | Oriental Land vs. Fastenal Company | Oriental Land vs. SiteOne Landscape Supply | Oriental Land vs. Ferguson Plc |
| Li Ning vs. YETI Holdings | Li Ning vs. Callaway Golf | Li Ning vs. Acushnet Holdings Corp | Li Ning vs. Planet Fitness |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |