Correlation Between Oriental Land and Trip Group
Can any of the company-specific risk be diversified away by investing in both Oriental Land and Trip Group 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 Trip Group 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 Trip Group Limited, you can compare the effects of market volatilities on Oriental Land and Trip Group 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 Trip Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Land and Trip Group.
Diversification Opportunities for Oriental Land and Trip Group
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oriental and Trip is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Land Co and Trip Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trip Group Limited 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 Trip Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trip Group Limited has no effect on the direction of Oriental Land i.e., Oriental Land and Trip Group go up and down completely randomly.
Pair Corralation between Oriental Land and Trip Group
Assuming the 90 days horizon Oriental Land is expected to generate 9.45 times less return on investment than Trip Group. But when comparing it to its historical volatility, Oriental Land Co is 1.29 times less risky than Trip Group. It trades about 0.01 of its potential returns per unit of risk. Trip Group Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,840 in Trip Group Limited on August 31, 2024 and sell it today you would earn a total of 180.00 from holding Trip Group Limited or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oriental Land Co vs. Trip Group Limited
Performance |
| Timeline |
| Oriental Land |
| Trip Group Limited |
Oriental Land and Trip Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Land and Trip Group
The main advantage of trading using opposite Oriental Land and Trip Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Land position performs unexpectedly, Trip Group 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 Trip Group will offset losses from the drop in Trip Group's long position.| Oriental Land vs. Li Ning Company | Oriental Land vs. Trip Group Limited | Oriental Land vs. Superior Plus Corp | Oriental Land vs. NMI Holdings |
| Trip Group vs. Microbot Medical | Trip Group vs. MeVis Medical Solutions | Trip Group vs. PUBLIC STORAGE PRFO | Trip Group vs. Avanos Medical |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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