Correlation Between Orient Overseas and Orient Overseas

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

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

Diversification Opportunities for Orient Overseas and Orient Overseas

0.56

Correlation Coefficient

Orient Overseas  Orient Overseas

Very weak diversification

The 3 months correlation between Orient and Orient is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Orient Overseas International and Orient Overseas Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Overseas and Orient Overseas 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 Orient Overseas International 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 Orient Overseas i.e., Orient Overseas and Orient Overseas go up and down completely randomly.

Pair Corralation between Orient Overseas and Orient Overseas

Assuming the 90 days horizon Orient Overseas International is expected to generate 0.51 times more return on investment than Orient Overseas. However, Orient Overseas International is 1.95 times less risky than Orient Overseas. It trades about 0.08 of its potential returns per unit of risk. Orient Overseas Limited is currently generating about -0.01 per unit of risk. If you would invest  6,459  in Orient Overseas International on December 1, 2024 and sell it today you would earn a total of  524.00  from holding Orient Overseas International or generate 8.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	71.67%
Values	Daily Returns

Orient Overseas International  vs.  Orient Overseas Limited

Orient Overseas Inte

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Orient Overseas International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Orient Overseas may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Orient Overseas

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Orient Overseas and Orient Overseas

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

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.