Correlation Between Chiba Bank and OAKTRSPECLENDNEW

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

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

Diversification Opportunities for Chiba Bank and OAKTRSPECLENDNEW

0.58

Correlation Coefficient

Chiba Bank  OAKTRSPECLENDNEW

Very weak diversification

The 3 months correlation between Chiba and OAKTRSPECLENDNEW is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Chiba Bank and OAKTRSPECLENDNEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OAKTRSPECLENDNEW and Chiba Bank 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 Chiba Bank are associated (or correlated) with OAKTRSPECLENDNEW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OAKTRSPECLENDNEW has no effect on the direction of Chiba Bank i.e., Chiba Bank and OAKTRSPECLENDNEW go up and down completely randomly.

Pair Corralation between Chiba Bank and OAKTRSPECLENDNEW

Assuming the 90 days horizon Chiba Bank is expected to generate 1.4 times more return on investment than OAKTRSPECLENDNEW. However, Chiba Bank is 1.4 times more volatile than OAKTRSPECLENDNEW. It trades about 0.14 of its potential returns per unit of risk. OAKTRSPECLENDNEW is currently generating about 0.03 per unit of risk. If you would invest  660.00  in Chiba Bank on September 27, 2024 and sell it today you would earn a total of  75.00  from holding Chiba Bank or generate 11.36% return on investment over 90 days.

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

Chiba Bank  vs.  OAKTRSPECLENDNEW

Chiba Bank

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Chiba Bank are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Chiba Bank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

OAKTRSPECLENDNEW

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in OAKTRSPECLENDNEW are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, OAKTRSPECLENDNEW is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Chiba Bank and OAKTRSPECLENDNEW

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

The idea behind Chiba Bank and OAKTRSPECLENDNEW 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.