Correlation Between Lion Biotechnologies and ORIX JREIT

Can any of the company-specific risk be diversified away by investing in both Lion Biotechnologies and ORIX JREIT 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 Lion Biotechnologies and ORIX JREIT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lion Biotechnologies and ORIX JREIT INC, you can compare the effects of market volatilities on Lion Biotechnologies and ORIX JREIT 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 Lion Biotechnologies with a short position of ORIX JREIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Biotechnologies and ORIX JREIT.

Diversification Opportunities for Lion Biotechnologies and ORIX JREIT

-0.34

Correlation Coefficient

Lion Biotechnologies  ORIX JREIT

Very good diversification

The 3 months correlation between Lion and ORIX is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lion Biotechnologies and ORIX JREIT INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORIX JREIT INC and Lion Biotechnologies 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 Lion Biotechnologies are associated (or correlated) with ORIX JREIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORIX JREIT INC has no effect on the direction of Lion Biotechnologies i.e., Lion Biotechnologies and ORIX JREIT go up and down completely randomly.

Pair Corralation between Lion Biotechnologies and ORIX JREIT

Assuming the 90 days trading horizon Lion Biotechnologies is expected to under-perform the ORIX JREIT. In addition to that, Lion Biotechnologies is 3.18 times more volatile than ORIX JREIT INC. It trades about -0.39 of its total potential returns per unit of risk. ORIX JREIT INC is currently generating about -0.31 per unit of volatility. If you would invest  102,000  in ORIX JREIT INC on September 28, 2024 and sell it today you would lose (5,500) from holding ORIX JREIT INC or give up 5.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lion Biotechnologies  vs.  ORIX JREIT INC

Lion Biotechnologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lion Biotechnologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

ORIX JREIT INC

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ORIX JREIT INC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ORIX JREIT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Lion Biotechnologies and ORIX JREIT

The main advantage of trading using opposite Lion Biotechnologies and ORIX JREIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Biotechnologies position performs unexpectedly, ORIX JREIT 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 JREIT will offset losses from the drop in ORIX JREIT's long position.

The idea behind Lion Biotechnologies and ORIX JREIT INC 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.