Correlation Between KYN Capital and Orix Corp

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

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

Diversification Opportunities for KYN Capital and Orix Corp

0.41

Correlation Coefficient

KYN Capital  Orix Corp

Very weak diversification

The 3 months correlation between KYN and Orix is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding KYN Capital Group and Orix Corp Ads in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orix Corp Ads and KYN Capital 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 KYN Capital Group are associated (or correlated) with Orix Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orix Corp Ads has no effect on the direction of KYN Capital i.e., KYN Capital and Orix Corp go up and down completely randomly.

Pair Corralation between KYN Capital and Orix Corp

Given the investment horizon of 90 days KYN Capital Group is expected to generate 10.67 times more return on investment than Orix Corp. However, KYN Capital is 10.67 times more volatile than Orix Corp Ads. It trades about 0.08 of its potential returns per unit of risk. Orix Corp Ads is currently generating about 0.06 per unit of risk. If you would invest  0.05  in KYN Capital Group on September 5, 2024 and sell it today you would earn a total of  0.02  from holding KYN Capital Group or generate 40.0% return on investment over 90 days.

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

KYN Capital Group  vs.  Orix Corp Ads

KYN Capital Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KYN Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, KYN Capital is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Orix Corp Ads

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orix Corp Ads has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Orix Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KYN Capital and Orix Corp

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

The idea behind KYN Capital Group and Orix Corp Ads 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.