Correlation Between Ono Pharmaceutical and Li Ning
Can any of the company-specific risk be diversified away by investing in both Ono Pharmaceutical and Li Ning 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 Ono Pharmaceutical and Li Ning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ono Pharmaceutical Co and Li Ning Company, you can compare the effects of market volatilities on Ono Pharmaceutical and Li Ning 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 Ono Pharmaceutical with a short position of Li Ning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ono Pharmaceutical and Li Ning.
Diversification Opportunities for Ono Pharmaceutical and Li Ning
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ono and LNNGF is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ono Pharmaceutical Co and Li Ning Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Li Ning Company and Ono Pharmaceutical 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 Ono Pharmaceutical Co are associated (or correlated) with Li Ning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Li Ning Company has no effect on the direction of Ono Pharmaceutical i.e., Ono Pharmaceutical and Li Ning go up and down completely randomly.
Pair Corralation between Ono Pharmaceutical and Li Ning
Assuming the 90 days horizon Ono Pharmaceutical Co is expected to under-perform the Li Ning. In addition to that, Ono Pharmaceutical is 1.33 times more volatile than Li Ning Company. It trades about -0.06 of its total potential returns per unit of risk. Li Ning Company is currently generating about -0.02 per unit of volatility. If you would invest 257.00 in Li Ning Company on August 24, 2024 and sell it today you would lose (50.00) from holding Li Ning Company or give up 19.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 34.78% |
| Values | Daily Returns |
Ono Pharmaceutical Co vs. Li Ning Company
Performance |
| Timeline |
| Ono Pharmaceutical |
| Li Ning Company |
Ono Pharmaceutical and Li Ning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ono Pharmaceutical and Li Ning
The main advantage of trading using opposite Ono Pharmaceutical and Li Ning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ono Pharmaceutical position performs unexpectedly, Li Ning 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 Li Ning will offset losses from the drop in Li Ning's long position.| Ono Pharmaceutical vs. Sanofi ADR | Ono Pharmaceutical vs. Bristol Myers Squibb | Ono Pharmaceutical vs. AstraZeneca PLC ADR | Ono Pharmaceutical vs. Gilead Sciences |
| Li Ning vs. YETI Holdings | Li Ning vs. Callaway Golf | Li Ning vs. Acushnet Holdings Corp | Li Ning vs. Planet Fitness |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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