Correlation Between Transportadora and Oshidori International

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

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

Diversification Opportunities for Transportadora and Oshidori International

0.94

Correlation Coefficient

Transportadora  Oshidori International

Almost no diversification

The 3 months correlation between Transportadora and Oshidori is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and Oshidori International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oshidori International and Transportadora 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 Transportadora de Gas 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 Transportadora i.e., Transportadora and Oshidori International go up and down completely randomly.

Pair Corralation between Transportadora and Oshidori International

Considering the 90-day investment horizon Transportadora is expected to generate 8.36 times less return on investment than Oshidori International. But when comparing it to its historical volatility, Transportadora de Gas is 13.05 times less risky than Oshidori International. It trades about 0.07 of its potential returns per unit of risk. Oshidori International Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.06  in Oshidori International Holdings on September 19, 2024 and sell it today you would earn a total of  0.94  from holding Oshidori International Holdings or generate 1566.67% return on investment over 90 days.

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

Transportadora de Gas  vs.  Oshidori International Holding

Transportadora de Gas

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Transportadora de Gas are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Transportadora unveiled solid returns over the last few months and may actually be approaching a breakup point.

Oshidori International

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oshidori International Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating fundamental indicators, Oshidori International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Transportadora and Oshidori International

The main advantage of trading using opposite Transportadora and Oshidori International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora 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 Transportadora de Gas 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.