Correlation Between Security Investment and ORIX Leasing
Can any of the company-specific risk be diversified away by investing in both Security Investment and ORIX 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 Security Investment and ORIX Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Security Investment Bank and ORIX Leasing Pakistan, you can compare the effects of market volatilities on Security Investment and ORIX 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 Security Investment with a short position of ORIX Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Security Investment and ORIX Leasing.
Diversification Opportunities for Security Investment and ORIX Leasing
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Security and ORIX is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Security Investment Bank and ORIX Leasing Pakistan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORIX Leasing Pakistan and Security Investment 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 Security Investment Bank are associated (or correlated) with ORIX Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORIX Leasing Pakistan has no effect on the direction of Security Investment i.e., Security Investment and ORIX Leasing go up and down completely randomly.
Pair Corralation between Security Investment and ORIX Leasing
Assuming the 90 days trading horizon Security Investment Bank is expected to generate 3.6 times more return on investment than ORIX Leasing. However, Security Investment is 3.6 times more volatile than ORIX Leasing Pakistan. It trades about 0.04 of its potential returns per unit of risk. ORIX Leasing Pakistan is currently generating about 0.11 per unit of risk. If you would invest 471.00 in Security Investment Bank on August 30, 2024 and sell it today you would earn a total of 29.00 from holding Security Investment Bank or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.69% |
| Values | Daily Returns |
Security Investment Bank vs. ORIX Leasing Pakistan
Performance |
| Timeline |
| Security Investment Bank |
| ORIX Leasing Pakistan |
Security Investment and ORIX Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Security Investment and ORIX Leasing
The main advantage of trading using opposite Security Investment and ORIX Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Security Investment position performs unexpectedly, ORIX 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 ORIX Leasing will offset losses from the drop in ORIX Leasing's long position.| Security Investment vs. Masood Textile Mills | Security Investment vs. Fauji Foods | Security Investment vs. KSB Pumps | Security Investment vs. Mari Petroleum |
| ORIX Leasing vs. Masood Textile Mills | ORIX Leasing vs. Fauji Foods | ORIX Leasing vs. KSB Pumps | ORIX Leasing 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |