Correlation Between Oriental Petroleum and Monde Nissin

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

By analyzing existing cross correlation between Oriental Petroleum and and Monde Nissin Corp, you can compare the effects of market volatilities on Oriental Petroleum and Monde Nissin 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 Oriental Petroleum with a short position of Monde Nissin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Petroleum and Monde Nissin.

Diversification Opportunities for Oriental Petroleum and Monde Nissin

0.38

Correlation Coefficient

Oriental Petroleum  Monde Nissin

Weak diversification

The 3 months correlation between Oriental and Monde is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Petroleum and and Monde Nissin Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monde Nissin Corp and Oriental Petroleum 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 Oriental Petroleum and are associated (or correlated) with Monde Nissin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monde Nissin Corp has no effect on the direction of Oriental Petroleum i.e., Oriental Petroleum and Monde Nissin go up and down completely randomly.

Pair Corralation between Oriental Petroleum and Monde Nissin

Assuming the 90 days trading horizon Oriental Petroleum and is expected to generate 1.41 times more return on investment than Monde Nissin. However, Oriental Petroleum is 1.41 times more volatile than Monde Nissin Corp. It trades about 0.17 of its potential returns per unit of risk. Monde Nissin Corp is currently generating about 0.03 per unit of risk. If you would invest  0.72  in Oriental Petroleum and on April 25, 2025 and sell it today you would earn a total of  0.28  from holding Oriental Petroleum and or generate 38.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Oriental Petroleum and  vs.  Monde Nissin Corp

Oriental Petroleum and

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oriental Petroleum and are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Oriental Petroleum exhibited solid returns over the last few months and may actually be approaching a breakup point.

Monde Nissin Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Monde Nissin Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Monde Nissin is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Oriental Petroleum and Monde Nissin

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

The idea behind Oriental Petroleum and and Monde Nissin Corp 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.