Correlation Between ORIX Leasing and Bank of Punjab
Can any of the company-specific risk be diversified away by investing in both ORIX Leasing and Bank of Punjab 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 Bank of Punjab 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 Bank of Punjab, you can compare the effects of market volatilities on ORIX Leasing and Bank of Punjab 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 Bank of Punjab. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORIX Leasing and Bank of Punjab.
Diversification Opportunities for ORIX Leasing and Bank of Punjab
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ORIX and Bank is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding ORIX Leasing Pakistan and Bank of Punjab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Punjab 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 Bank of Punjab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Punjab has no effect on the direction of ORIX Leasing i.e., ORIX Leasing and Bank of Punjab go up and down completely randomly.
Pair Corralation between ORIX Leasing and Bank of Punjab
Assuming the 90 days trading horizon ORIX Leasing is expected to generate 2.13 times less return on investment than Bank of Punjab. But when comparing it to its historical volatility, ORIX Leasing Pakistan is 1.74 times less risky than Bank of Punjab. It trades about 0.14 of its potential returns per unit of risk. Bank of Punjab is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 502.00 in Bank of Punjab on October 13, 2024 and sell it today you would earn a total of 507.00 from holding Bank of Punjab or generate 101.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.29% |
| Values | Daily Returns |
ORIX Leasing Pakistan vs. Bank of Punjab
Performance |
| Timeline |
| ORIX Leasing Pakistan |
| Bank of Punjab |
ORIX Leasing and Bank of Punjab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORIX Leasing and Bank of Punjab
The main advantage of trading using opposite ORIX Leasing and Bank of Punjab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORIX Leasing position performs unexpectedly, Bank of Punjab 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 Bank of Punjab will offset losses from the drop in Bank of Punjab's long position.| ORIX Leasing vs. Fauji Foods | ORIX Leasing vs. Universal Insurance | ORIX Leasing vs. JS Global Banking | ORIX Leasing vs. NetSol Technologies |
| Bank of Punjab vs. Aisha Steel Mills | Bank of Punjab vs. Lotte Chemical Pakistan | Bank of Punjab vs. Wah Nobel Chemicals | Bank of Punjab vs. Unity Foods |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |