Correlation Between Fateh Sports and ORIX Leasing

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Can any of the company-specific risk be diversified away by investing in both Fateh Sports and ORIX Leasing 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 Fateh Sports and ORIX Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fateh Sports Wear and ORIX Leasing Pakistan, you can compare the effects of market volatilities on Fateh Sports and ORIX Leasing 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 Fateh Sports with a short position of ORIX Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fateh Sports and ORIX Leasing.

Diversification Opportunities for Fateh Sports and ORIX Leasing

0.14
  Correlation Coefficient

Average diversification

The 3 months correlation between Fateh and ORIX is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Fateh Sports Wear and ORIX Leasing Pakistan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORIX Leasing Pakistan and Fateh Sports 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 Fateh Sports Wear are associated (or correlated) with ORIX Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORIX Leasing Pakistan has no effect on the direction of Fateh Sports i.e., Fateh Sports and ORIX Leasing go up and down completely randomly.

Pair Corralation between Fateh Sports and ORIX Leasing

Assuming the 90 days trading horizon Fateh Sports Wear is expected to under-perform the ORIX Leasing. In addition to that, Fateh Sports is 1.46 times more volatile than ORIX Leasing Pakistan. It trades about -0.4 of its total potential returns per unit of risk. ORIX Leasing Pakistan is currently generating about 0.16 per unit of volatility. If you would invest  2,931  in ORIX Leasing Pakistan on October 26, 2024 and sell it today you would earn a total of  692.00  from holding ORIX Leasing Pakistan or generate 23.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy40.98%
ValuesDaily Returns

Fateh Sports Wear  vs.  ORIX Leasing Pakistan

 Performance 
       Timeline  
Fateh Sports Wear 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Fateh Sports Wear has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
ORIX Leasing Pakistan 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in ORIX Leasing Pakistan are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ORIX Leasing sustained solid returns over the last few months and may actually be approaching a breakup point.

Fateh Sports and ORIX Leasing Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fateh Sports and ORIX Leasing

The main advantage of trading using opposite Fateh Sports and ORIX Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fateh Sports position performs unexpectedly, ORIX Leasing 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 Leasing will offset losses from the drop in ORIX Leasing's long position.
The idea behind Fateh Sports Wear and ORIX Leasing Pakistan 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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