Correlation Between State Bank and Orix Corp
Can any of the company-specific risk be diversified away by investing in both State Bank and Orix Corp 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 State Bank and Orix Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Bank of and Orix Corp Ads, you can compare the effects of market volatilities on State Bank and Orix Corp 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 State Bank with a short position of Orix Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Orix Corp.
Diversification Opportunities for State Bank and Orix Corp
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between State and Orix is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Orix Corp Ads in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orix Corp Ads and State Bank 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 State Bank of are associated (or correlated) with Orix Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orix Corp Ads has no effect on the direction of State Bank i.e., State Bank and Orix Corp go up and down completely randomly.
Pair Corralation between State Bank and Orix Corp
Assuming the 90 days horizon State Bank of is expected to generate 1.21 times more return on investment than Orix Corp. However, State Bank is 1.21 times more volatile than Orix Corp Ads. It trades about 0.01 of its potential returns per unit of risk. Orix Corp Ads is currently generating about -0.06 per unit of risk. If you would invest 8,850 in State Bank of on August 28, 2024 and sell it today you would earn a total of 50.00 from holding State Bank of or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
State Bank of vs. Orix Corp Ads
Performance |
| Timeline |
| State Bank |
| Orix Corp Ads |
State Bank and Orix Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Orix Corp
The main advantage of trading using opposite State Bank and Orix Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Orix Corp 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 Corp will offset losses from the drop in Orix Corp's long position.The idea behind State Bank of and Orix Corp Ads pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Orix Corp vs. Superior Plus Corp | Orix Corp vs. NMI Holdings | Orix Corp vs. Origin Agritech | Orix Corp vs. SIVERS SEMICONDUCTORS AB |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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