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 Co, 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
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oriental and LNNGY is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Land Co and Li Ning Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Li Ning 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 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
If you would invest 2,600 in Oriental Land Co on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Oriental Land Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oriental Land Co vs. Li Ning Co
Performance |
| Timeline |
| Oriental Land |
| Li Ning |
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. Copa Holdings SA | Oriental Land vs. United Airlines Holdings | Oriental Land vs. Delta Air Lines | Oriental Land vs. SkyWest |
| Li Ning vs. HUMANA INC | Li Ning vs. Aquagold International | Li Ning vs. Barloworld Ltd ADR | Li Ning vs. Morningstar Unconstrained Allocation |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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