Correlation Between Japan Steel and OSRAM LICHT

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

By analyzing existing cross correlation between The Japan Steel and OSRAM LICHT N, you can compare the effects of market volatilities on Japan Steel and OSRAM LICHT 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 Japan Steel with a short position of OSRAM LICHT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Steel and OSRAM LICHT.

Diversification Opportunities for Japan Steel and OSRAM LICHT

0.0

Correlation Coefficient

Japan Steel  OSRAM LICHT

Pay attention - limited upside

The 3 months correlation between Japan and OSRAM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Japan Steel and OSRAM LICHT N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSRAM LICHT N and Japan Steel 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 The Japan Steel are associated (or correlated) with OSRAM LICHT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSRAM LICHT N has no effect on the direction of Japan Steel i.e., Japan Steel and OSRAM LICHT go up and down completely randomly.

Pair Corralation between Japan Steel and OSRAM LICHT

If you would invest  3,520  in The Japan Steel on May 20, 2025 and sell it today you would earn a total of  2,030  from holding The Japan Steel or generate 57.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

The Japan Steel  vs.  OSRAM LICHT N

Japan Steel

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Japan Steel are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Japan Steel reported solid returns over the last few months and may actually be approaching a breakup point.

OSRAM LICHT N

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in OSRAM LICHT N are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, OSRAM LICHT is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Japan Steel and OSRAM LICHT

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

The idea behind The Japan Steel and OSRAM LICHT N 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.