Correlation Between Orbitech and Osang Healthcare

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

By analyzing existing cross correlation between Orbitech Co and Osang Healthcare Co,Ltd, you can compare the effects of market volatilities on Orbitech and Osang Healthcare 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 Orbitech with a short position of Osang Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orbitech and Osang Healthcare.

Diversification Opportunities for Orbitech and Osang Healthcare

0.43

Correlation Coefficient

Orbitech  Osang Healthcare

Very weak diversification

The 3 months correlation between Orbitech and Osang is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Orbitech Co and Osang Healthcare Co,Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osang Healthcare Co,Ltd and Orbitech 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 Orbitech Co are associated (or correlated) with Osang Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osang Healthcare Co,Ltd has no effect on the direction of Orbitech i.e., Orbitech and Osang Healthcare go up and down completely randomly.

Pair Corralation between Orbitech and Osang Healthcare

Assuming the 90 days trading horizon Orbitech Co is expected to under-perform the Osang Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, Orbitech Co is 1.27 times less risky than Osang Healthcare. The stock trades about -0.08 of its potential returns per unit of risk. The Osang Healthcare Co,Ltd is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,342,000  in Osang Healthcare Co,Ltd on September 14, 2024 and sell it today you would lose (184,000) from holding Osang Healthcare Co,Ltd or give up 13.71% of portfolio value over 90 days.

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

Orbitech Co  vs.  Osang Healthcare Co,Ltd

Orbitech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orbitech Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Osang Healthcare Co,Ltd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Osang Healthcare Co,Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Orbitech and Osang Healthcare

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

The idea behind Orbitech Co and Osang Healthcare Co,Ltd 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.