Correlation Between Credicorp and Orix Corp

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

By analyzing existing cross correlation between Credicorp and Orix Corp Ads, you can compare the effects of market volatilities on Credicorp 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 Credicorp with a short position of Orix Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credicorp and Orix Corp.

Diversification Opportunities for Credicorp and Orix Corp

0.0

Correlation Coefficient

Credicorp  Orix Corp

Pay attention - limited upside

The 3 months correlation between Credicorp and Orix is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Credicorp 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 Credicorp 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 Credicorp 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 Credicorp i.e., Credicorp and Orix Corp go up and down completely randomly.

Pair Corralation between Credicorp and Orix Corp

Considering the 90-day investment horizon Credicorp is expected to generate 1.12 times more return on investment than Orix Corp. However, Credicorp is 1.12 times more volatile than Orix Corp Ads. It trades about -0.15 of its potential returns per unit of risk. Orix Corp Ads is currently generating about -0.3 per unit of risk. If you would invest  19,083  in Credicorp on October 3, 2024 and sell it today you would lose (751.00) from holding Credicorp or give up 3.94% of portfolio value over 90 days.

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

Credicorp  vs.  Orix Corp Ads

Credicorp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Credicorp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Credicorp is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Orix Corp Ads

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orix Corp Ads has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of 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 Credicorp and Orix Corp

The main advantage of trading using opposite Credicorp and Orix Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credicorp 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 Credicorp 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..