Correlation Between ORIX Leasing and Towellers
Can any of the company-specific risk be diversified away by investing in both ORIX Leasing and Towellers 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 Towellers 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 Towellers, you can compare the effects of market volatilities on ORIX Leasing and Towellers 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 Towellers. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORIX Leasing and Towellers.
Diversification Opportunities for ORIX Leasing and Towellers
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ORIX and Towellers is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding ORIX Leasing Pakistan and Towellers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Towellers 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 Towellers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Towellers has no effect on the direction of ORIX Leasing i.e., ORIX Leasing and Towellers go up and down completely randomly.
Pair Corralation between ORIX Leasing and Towellers
Assuming the 90 days trading horizon ORIX Leasing Pakistan is expected to generate 0.89 times more return on investment than Towellers. However, ORIX Leasing Pakistan is 1.13 times less risky than Towellers. It trades about 0.12 of its potential returns per unit of risk. Towellers is currently generating about 0.03 per unit of risk. If you would invest 2,534 in ORIX Leasing Pakistan on September 3, 2024 and sell it today you would earn a total of 635.00 from holding ORIX Leasing Pakistan or generate 25.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.18% |
| Values | Daily Returns |
ORIX Leasing Pakistan vs. Towellers
Performance |
| Timeline |
| ORIX Leasing Pakistan |
| Towellers |
ORIX Leasing and Towellers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORIX Leasing and Towellers
The main advantage of trading using opposite ORIX Leasing and Towellers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORIX Leasing position performs unexpectedly, Towellers 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 Towellers will offset losses from the drop in Towellers' long position.| ORIX Leasing vs. Masood Textile Mills | ORIX Leasing vs. Fauji Foods | ORIX Leasing vs. KSB Pumps | ORIX Leasing vs. Mari Petroleum |
| Towellers vs. Pakistan Telecommunication | Towellers vs. International Steels | Towellers vs. United Insurance | Towellers vs. Askari Bank |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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