Correlation Between Liaoning Port and Orient Overseas

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

By analyzing existing cross correlation between Liaoning Port CoLtd and Orient Overseas Limited, you can compare the effects of market volatilities on Liaoning Port and Orient Overseas 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 Liaoning Port with a short position of Orient Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Port and Orient Overseas.

Diversification Opportunities for Liaoning Port and Orient Overseas

0.0

Correlation Coefficient

Liaoning Port  Orient Overseas

Pay attention - limited upside

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

Pair Corralation between Liaoning Port and Orient Overseas

If you would invest  730.00  in Orient Overseas Limited on October 8, 2024 and sell it today you would earn a total of  742.00  from holding Orient Overseas Limited or generate 101.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.4%
Values	Daily Returns

Liaoning Port CoLtd  vs.  Orient Overseas Limited

Liaoning Port CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liaoning Port CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Liaoning Port is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Orient Overseas

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Orient Overseas Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward indicators, Orient Overseas reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Liaoning Port and Orient Overseas

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

The idea behind Liaoning Port CoLtd and Orient Overseas Limited 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.