Correlation Between Bank of China Limited and Orix Corp
Can any of the company-specific risk be diversified away by investing in both Bank of China Limited 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 Bank of China Limited and Orix Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of China and Orix Corp Ads, you can compare the effects of market volatilities on Bank of China Limited 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 Bank of China Limited with a short position of Orix Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China Limited and Orix Corp.
Diversification Opportunities for Bank of China Limited and Orix Corp
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Orix is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China 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 Bank of China Limited 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 Bank of China 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 Bank of China Limited i.e., Bank of China Limited and Orix Corp go up and down completely randomly.
Pair Corralation between Bank of China Limited and Orix Corp
Assuming the 90 days horizon Bank of China Limited is expected to generate 16.7 times less return on investment than Orix Corp. In addition to that, Bank of China Limited is 1.07 times more volatile than Orix Corp Ads. It trades about 0.01 of its total potential returns per unit of risk. Orix Corp Ads is currently generating about 0.16 per unit of volatility. If you would invest 9,550 in Orix Corp Ads on August 28, 2024 and sell it today you would earn a total of 550.00 from holding Orix Corp Ads or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Orix Corp Ads
Performance |
| Timeline |
| Bank of China Limited |
| Orix Corp Ads |
Bank of China Limited and Orix Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China Limited and Orix Corp
The main advantage of trading using opposite Bank of China Limited and Orix Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China Limited 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.| Bank of China Limited vs. Superior Plus Corp | Bank of China Limited vs. NMI Holdings | Bank of China Limited vs. Origin Agritech | Bank of China Limited vs. SIVERS SEMICONDUCTORS AB |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |