Correlation Between SITC International and Orient Overseas
Can any of the company-specific risk be diversified away by investing in both SITC International 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 SITC International and Orient Overseas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SITC International Holdings and Orient Overseas Limited, you can compare the effects of market volatilities on SITC International 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 SITC International with a short position of Orient Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of SITC International and Orient Overseas.
Diversification Opportunities for SITC International and Orient Overseas
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SITC and Orient is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding SITC International Holdings and Orient Overseas Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Overseas and SITC International 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 SITC International Holdings 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 SITC International i.e., SITC International and Orient Overseas go up and down completely randomly.
Pair Corralation between SITC International and Orient Overseas
Assuming the 90 days horizon SITC International is expected to generate 1.18 times less return on investment than Orient Overseas. In addition to that, SITC International is 2.89 times more volatile than Orient Overseas Limited. It trades about 0.04 of its total potential returns per unit of risk. Orient Overseas Limited is currently generating about 0.13 per unit of volatility. If you would invest 1,550 in Orient Overseas Limited on May 2, 2025 and sell it today you would earn a total of 215.00 from holding Orient Overseas Limited or generate 13.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 90.16% |
Values | Daily Returns |
SITC International Holdings vs. Orient Overseas Limited
Performance |
Timeline |
SITC International |
Orient Overseas |
SITC International and Orient Overseas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SITC International and Orient Overseas
The main advantage of trading using opposite SITC International and Orient Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SITC International 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.SITC International vs. Mitsui OSK Lines | SITC International vs. Orient Overseas Limited | SITC International vs. Orient Overseas International | SITC International vs. Hapag Lloyd Aktiengesellschaft |
Orient Overseas vs. SITC International Holdings | Orient Overseas vs. Orient Overseas International | Orient Overseas vs. Mitsui OSK Lines | Orient Overseas vs. Pacific Basin Shipping |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
AI Portfolio Prophet Use AI to generate optimal portfolios and find profitable investment opportunities | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data |