Correlation Between State Street and Oshidori International

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

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

Diversification Opportunities for State Street and Oshidori International

-0.2

Correlation Coefficient

State Street  Oshidori International

Good diversification

The 3 months correlation between State and Oshidori is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding State Street Institutional and Oshidori International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oshidori International and State Street 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 State Street Institutional are associated (or correlated) with Oshidori International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oshidori International has no effect on the direction of State Street i.e., State Street and Oshidori International go up and down completely randomly.

Pair Corralation between State Street and Oshidori International

Assuming the 90 days horizon State Street Institutional is expected to under-perform the Oshidori International. But the mutual fund apears to be less risky and, when comparing its historical volatility, State Street Institutional is 24.53 times less risky than Oshidori International. The mutual fund trades about -0.33 of its potential returns per unit of risk. The Oshidori International Holdings is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1.00  in Oshidori International Holdings on September 27, 2024 and sell it today you would earn a total of  2.60  from holding Oshidori International Holdings or generate 260.0% return on investment over 90 days.

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

State Street Institutional  vs.  Oshidori International Holding

State Street Institu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days State Street Institutional has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Oshidori International

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oshidori International Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Oshidori International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with State Street and Oshidori International

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

The idea behind State Street Institutional and Oshidori International Holdings 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.