Correlation Between ORIX Leasing and Pakistan Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both ORIX Leasing and Pakistan Telecommunicatio 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 Pakistan Telecommunicatio 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 Pakistan Telecommunication, you can compare the effects of market volatilities on ORIX Leasing and Pakistan Telecommunicatio 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 Pakistan Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORIX Leasing and Pakistan Telecommunicatio.
Diversification Opportunities for ORIX Leasing and Pakistan Telecommunicatio
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ORIX and Pakistan is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding ORIX Leasing Pakistan and Pakistan Telecommunication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pakistan Telecommunicatio 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 Pakistan Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pakistan Telecommunicatio has no effect on the direction of ORIX Leasing i.e., ORIX Leasing and Pakistan Telecommunicatio go up and down completely randomly.
Pair Corralation between ORIX Leasing and Pakistan Telecommunicatio
Assuming the 90 days trading horizon ORIX Leasing is expected to generate 1.5 times less return on investment than Pakistan Telecommunicatio. But when comparing it to its historical volatility, ORIX Leasing Pakistan is 2.1 times less risky than Pakistan Telecommunicatio. It trades about 0.13 of its potential returns per unit of risk. Pakistan Telecommunication is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 669.00 in Pakistan Telecommunication on November 2, 2024 and sell it today you would earn a total of 1,745 from holding Pakistan Telecommunication or generate 260.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.38% |
| Values | Daily Returns |
ORIX Leasing Pakistan vs. Pakistan Telecommunication
Performance |
| Timeline |
| ORIX Leasing Pakistan |
| Pakistan Telecommunicatio |
ORIX Leasing and Pakistan Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORIX Leasing and Pakistan Telecommunicatio
The main advantage of trading using opposite ORIX Leasing and Pakistan Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORIX Leasing position performs unexpectedly, Pakistan Telecommunicatio 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 Pakistan Telecommunicatio will offset losses from the drop in Pakistan Telecommunicatio's long position.| ORIX Leasing vs. Unilever Pakistan Foods | ORIX Leasing vs. Matco Foods | ORIX Leasing vs. MCB Investment Manag | ORIX Leasing vs. Aisha Steel Mills |
| Pakistan Telecommunicatio vs. Apna Microfinance Bank | Pakistan Telecommunicatio vs. Fauji Foods | Pakistan Telecommunicatio vs. East West Insurance | Pakistan Telecommunicatio vs. Unilever Pakistan 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |