Correlation Between ORIX Leasing and Meezan Bank
Can any of the company-specific risk be diversified away by investing in both ORIX Leasing and Meezan Bank 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 Meezan Bank 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 Meezan Bank, you can compare the effects of market volatilities on ORIX Leasing and Meezan Bank 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 Meezan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORIX Leasing and Meezan Bank.
Diversification Opportunities for ORIX Leasing and Meezan Bank
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ORIX and Meezan is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding ORIX Leasing Pakistan and Meezan Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meezan Bank 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 Meezan Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meezan Bank has no effect on the direction of ORIX Leasing i.e., ORIX Leasing and Meezan Bank go up and down completely randomly.
Pair Corralation between ORIX Leasing and Meezan Bank
Assuming the 90 days trading horizon ORIX Leasing is expected to generate 1.15 times less return on investment than Meezan Bank. But when comparing it to its historical volatility, ORIX Leasing Pakistan is 1.06 times less risky than Meezan Bank. It trades about 0.16 of its potential returns per unit of risk. Meezan Bank is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 11,930 in Meezan Bank on August 25, 2024 and sell it today you would earn a total of 13,814 from holding Meezan Bank or generate 115.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.86% |
| Values | Daily Returns |
ORIX Leasing Pakistan vs. Meezan Bank
Performance |
| Timeline |
| ORIX Leasing Pakistan |
| Meezan Bank |
ORIX Leasing and Meezan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORIX Leasing and Meezan Bank
The main advantage of trading using opposite ORIX Leasing and Meezan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORIX Leasing position performs unexpectedly, Meezan Bank 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 Meezan Bank will offset losses from the drop in Meezan Bank's long position.| ORIX Leasing vs. Masood Textile Mills | ORIX Leasing vs. Fauji Foods | ORIX Leasing vs. KSB Pumps | ORIX Leasing vs. Mari Petroleum |
| Meezan Bank vs. ORIX Leasing Pakistan | Meezan Bank vs. National Bank of | Meezan Bank vs. Orient Rental Modaraba | Meezan Bank vs. Data Agro |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |