Correlation Between Otsuka Information and Golden Long

Can any of the company-specific risk be diversified away by investing in both Otsuka Information and Golden Long 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 Otsuka Information and Golden Long into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Otsuka Information Technology and Golden Long Teng, you can compare the effects of market volatilities on Otsuka Information and Golden Long 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 Otsuka Information with a short position of Golden Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Otsuka Information and Golden Long.

Diversification Opportunities for Otsuka Information and Golden Long

0.0

Correlation Coefficient

Otsuka Information  Golden Long

Pay attention - limited upside

The 3 months correlation between Otsuka and Golden is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Otsuka Information Technology and Golden Long Teng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Long Teng and Otsuka Information 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 Otsuka Information Technology are associated (or correlated) with Golden Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Long Teng has no effect on the direction of Otsuka Information i.e., Otsuka Information and Golden Long go up and down completely randomly.

Pair Corralation between Otsuka Information and Golden Long

If you would invest  14,450  in Otsuka Information Technology on October 27, 2024 and sell it today you would earn a total of  2,350  from holding Otsuka Information Technology or generate 16.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Otsuka Information Technology  vs.  Golden Long Teng

Otsuka Information

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Otsuka Information Technology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Otsuka Information showed solid returns over the last few months and may actually be approaching a breakup point.

Golden Long Teng

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Long Teng has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Golden Long is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Otsuka Information and Golden Long

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

The idea behind Otsuka Information Technology and Golden Long Teng 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.