Correlation Between OAKTRSPECLENDNEW and Mizuho Financial

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

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

Diversification Opportunities for OAKTRSPECLENDNEW and Mizuho Financial

0.54

Correlation Coefficient

OAKTRSPECLENDNEW  Mizuho Financial

Very weak diversification

The 3 months correlation between OAKTRSPECLENDNEW and Mizuho is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding OAKTRSPECLENDNEW and Mizuho Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mizuho Financial and OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW are associated (or correlated) with Mizuho Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mizuho Financial has no effect on the direction of OAKTRSPECLENDNEW i.e., OAKTRSPECLENDNEW and Mizuho Financial go up and down completely randomly.

Pair Corralation between OAKTRSPECLENDNEW and Mizuho Financial

Assuming the 90 days trading horizon OAKTRSPECLENDNEW is expected to generate 109.25 times less return on investment than Mizuho Financial. But when comparing it to its historical volatility, OAKTRSPECLENDNEW is 1.71 times less risky than Mizuho Financial. It trades about 0.0 of its potential returns per unit of risk. Mizuho Financial Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  380.00  in Mizuho Financial Group on October 20, 2024 and sell it today you would earn a total of  98.00  from holding Mizuho Financial Group or generate 25.79% return on investment over 90 days.

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

OAKTRSPECLENDNEW  vs.  Mizuho Financial Group

OAKTRSPECLENDNEW

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OAKTRSPECLENDNEW has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Mizuho Financial

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mizuho Financial Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Mizuho Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OAKTRSPECLENDNEW and Mizuho Financial

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

The idea behind OAKTRSPECLENDNEW and Mizuho Financial Group 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.