Correlation Between Industrial and Orient Sec

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

By analyzing existing cross correlation between Industrial and Commercial and Orient Sec Co, you can compare the effects of market volatilities on Industrial and Orient Sec 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 Industrial with a short position of Orient Sec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Orient Sec.

Diversification Opportunities for Industrial and Orient Sec

-0.29

Correlation Coefficient

Industrial  Orient Sec

Very good diversification

The 3 months correlation between Industrial and Orient is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and Orient Sec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Sec and Industrial 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 Industrial and Commercial are associated (or correlated) with Orient Sec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Sec has no effect on the direction of Industrial i.e., Industrial and Orient Sec go up and down completely randomly.

Pair Corralation between Industrial and Orient Sec

Assuming the 90 days trading horizon Industrial and Commercial is expected to generate 0.82 times more return on investment than Orient Sec. However, Industrial and Commercial is 1.22 times less risky than Orient Sec. It trades about 0.11 of its potential returns per unit of risk. Orient Sec Co is currently generating about -0.1 per unit of risk. If you would invest  632.00  in Industrial and Commercial on December 7, 2024 and sell it today you would earn a total of  51.00  from holding Industrial and Commercial or generate 8.07% return on investment over 90 days.

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

Industrial and Commercial  vs.  Orient Sec Co

Industrial and Commercial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Industrial and Commercial are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Industrial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Orient Sec

Risk-Adjusted Performance

Very Weak

Over the last 90 days Orient Sec Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Industrial and Orient Sec

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

The idea behind Industrial and Commercial and Orient Sec Co 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.