Correlation Between ORIX Leasing and Big Bird
Can any of the company-specific risk be diversified away by investing in both ORIX Leasing and Big Bird 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 ORIX Leasing and Big Bird into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ORIX Leasing Pakistan and Big Bird Foods, you can compare the effects of market volatilities on ORIX Leasing and Big Bird 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 ORIX Leasing with a short position of Big Bird. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORIX Leasing and Big Bird.
Diversification Opportunities for ORIX Leasing and Big Bird
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ORIX and Big is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding ORIX Leasing Pakistan and Big Bird Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Bird Foods and ORIX Leasing 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 ORIX Leasing Pakistan are associated (or correlated) with Big Bird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Bird Foods has no effect on the direction of ORIX Leasing i.e., ORIX Leasing and Big Bird go up and down completely randomly.
Pair Corralation between ORIX Leasing and Big Bird
Assuming the 90 days trading horizon ORIX Leasing Pakistan is expected to under-perform the Big Bird. But the stock apears to be less risky and, when comparing its historical volatility, ORIX Leasing Pakistan is 2.38 times less risky than Big Bird. The stock trades about -0.13 of its potential returns per unit of risk. The Big Bird Foods is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5,184 in Big Bird Foods on October 22, 2024 and sell it today you would earn a total of 357.00 from holding Big Bird Foods or generate 6.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ORIX Leasing Pakistan vs. Big Bird Foods
Performance |
| Timeline |
| ORIX Leasing Pakistan |
| Big Bird Foods |
ORIX Leasing and Big Bird Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORIX Leasing and Big Bird
The main advantage of trading using opposite ORIX Leasing and Big Bird positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORIX Leasing position performs unexpectedly, Big Bird 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 Big Bird will offset losses from the drop in Big Bird's long position.| ORIX Leasing vs. Habib Bank | ORIX Leasing vs. National Bank of | ORIX Leasing vs. United Bank | ORIX Leasing vs. MCB Bank |
| Big Bird vs. Habib Insurance | Big Bird vs. Ghandhara Automobile | Big Bird vs. Century Insurance | Big Bird vs. Reliance Weaving Mills |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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