Correlation Between Orient Rental and Wah Nobel
Can any of the company-specific risk be diversified away by investing in both Orient Rental and Wah Nobel 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 Wah Nobel 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 Wah Nobel Chemicals, you can compare the effects of market volatilities on Orient Rental and Wah Nobel 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 Wah Nobel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Rental and Wah Nobel.
Diversification Opportunities for Orient Rental and Wah Nobel
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Orient and Wah is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Orient Rental Modaraba and Wah Nobel Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wah Nobel Chemicals 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 Wah Nobel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wah Nobel Chemicals has no effect on the direction of Orient Rental i.e., Orient Rental and Wah Nobel go up and down completely randomly.
Pair Corralation between Orient Rental and Wah Nobel
Assuming the 90 days trading horizon Orient Rental Modaraba is expected to generate 2.1 times more return on investment than Wah Nobel. However, Orient Rental is 2.1 times more volatile than Wah Nobel Chemicals. It trades about 0.09 of its potential returns per unit of risk. Wah Nobel Chemicals is currently generating about 0.17 per unit of risk. If you would invest 760.00 in Orient Rental Modaraba on September 12, 2024 and sell it today you would earn a total of 45.00 from holding Orient Rental Modaraba or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orient Rental Modaraba vs. Wah Nobel Chemicals
Performance |
| Timeline |
| Orient Rental Modaraba |
| Wah Nobel Chemicals |
Orient Rental and Wah Nobel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orient Rental and Wah Nobel
The main advantage of trading using opposite Orient Rental and Wah Nobel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orient Rental position performs unexpectedly, Wah Nobel 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 Wah Nobel will offset losses from the drop in Wah Nobel's long position.| Orient Rental vs. Masood Textile Mills | Orient Rental vs. Fauji Foods | Orient Rental vs. KSB Pumps | Orient Rental vs. Mari Petroleum |
| Wah Nobel vs. Masood Textile Mills | Wah Nobel vs. Fauji Foods | Wah Nobel vs. KSB Pumps | Wah Nobel vs. Mari Petroleum |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |