Correlation Between Orient Rental and Grays Leasing
Can any of the company-specific risk be diversified away by investing in both Orient Rental and Grays Leasing 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 Rental and Grays Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orient Rental Modaraba and Grays Leasing, you can compare the effects of market volatilities on Orient Rental and Grays Leasing 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 Rental with a short position of Grays Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Rental and Grays Leasing.
Diversification Opportunities for Orient Rental and Grays Leasing
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Orient and Grays is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Orient Rental Modaraba and Grays Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grays Leasing and Orient Rental 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 Rental Modaraba are associated (or correlated) with Grays Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grays Leasing has no effect on the direction of Orient Rental i.e., Orient Rental and Grays Leasing go up and down completely randomly.
Pair Corralation between Orient Rental and Grays Leasing
Assuming the 90 days trading horizon Orient Rental Modaraba is expected to generate 0.45 times more return on investment than Grays Leasing. However, Orient Rental Modaraba is 2.23 times less risky than Grays Leasing. It trades about 0.12 of its potential returns per unit of risk. Grays Leasing is currently generating about 0.04 per unit of risk. If you would invest 583.00 in Orient Rental Modaraba on September 2, 2024 and sell it today you would earn a total of 170.00 from holding Orient Rental Modaraba or generate 29.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 85.84% |
| Values | Daily Returns |
Orient Rental Modaraba vs. Grays Leasing
Performance |
| Timeline |
| Orient Rental Modaraba |
| Grays Leasing |
Orient Rental and Grays Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orient Rental and Grays Leasing
The main advantage of trading using opposite Orient Rental and Grays Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orient Rental position performs unexpectedly, Grays Leasing 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 Grays Leasing will offset losses from the drop in Grays Leasing's long position.| Orient Rental vs. Masood Textile Mills | Orient Rental vs. Fauji Foods | Orient Rental vs. KSB Pumps | Orient Rental vs. Mari Petroleum |
| Grays Leasing vs. MCB Investment Manag | Grays Leasing vs. 786 Investment Limited | Grays Leasing vs. Air Link Communication | Grays Leasing vs. JS Investments |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |