Correlation Between Orient Overseas and SPARTAN STORES
Can any of the company-specific risk be diversified away by investing in both Orient Overseas and SPARTAN STORES 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 Orient Overseas and SPARTAN STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orient Overseas Limited and SPARTAN STORES, you can compare the effects of market volatilities on Orient Overseas and SPARTAN STORES 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 Orient Overseas with a short position of SPARTAN STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Overseas and SPARTAN STORES.
Diversification Opportunities for Orient Overseas and SPARTAN STORES
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Orient and SPARTAN is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Orient Overseas Limited and SPARTAN STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTAN STORES and Orient Overseas 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 Orient Overseas Limited are associated (or correlated) with SPARTAN STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPARTAN STORES has no effect on the direction of Orient Overseas i.e., Orient Overseas and SPARTAN STORES go up and down completely randomly.
Pair Corralation between Orient Overseas and SPARTAN STORES
Assuming the 90 days trading horizon Orient Overseas Limited is expected to generate 1.37 times more return on investment than SPARTAN STORES. However, Orient Overseas is 1.37 times more volatile than SPARTAN STORES. It trades about 0.34 of its potential returns per unit of risk. SPARTAN STORES is currently generating about 0.04 per unit of risk. If you would invest 1,221 in Orient Overseas Limited on October 9, 2024 and sell it today you would earn a total of 189.00 from holding Orient Overseas Limited or generate 15.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orient Overseas Limited vs. SPARTAN STORES
Performance |
| Timeline |
| Orient Overseas |
| SPARTAN STORES |
Orient Overseas and SPARTAN STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orient Overseas and SPARTAN STORES
The main advantage of trading using opposite Orient Overseas and SPARTAN STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orient Overseas position performs unexpectedly, SPARTAN STORES 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 SPARTAN STORES will offset losses from the drop in SPARTAN STORES's long position.| Orient Overseas vs. COMBA TELECOM SYST | Orient Overseas vs. Entravision Communications | Orient Overseas vs. Cogent Communications Holdings | Orient Overseas vs. ECHO INVESTMENT ZY |
| SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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