Correlation Between Sensorion and Orapi SA

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

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

Diversification Opportunities for Sensorion and Orapi SA

-0.01

Correlation Coefficient

Sensorion  Orapi SA

Good diversification

The 3 months correlation between Sensorion and Orapi is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sensorion SA and Orapi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orapi SA and Sensorion 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 Sensorion SA are associated (or correlated) with Orapi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orapi SA has no effect on the direction of Sensorion i.e., Sensorion and Orapi SA go up and down completely randomly.

Pair Corralation between Sensorion and Orapi SA

Assuming the 90 days trading horizon Sensorion is expected to generate 2.65 times less return on investment than Orapi SA. In addition to that, Sensorion is 2.8 times more volatile than Orapi SA. It trades about 0.02 of its total potential returns per unit of risk. Orapi SA is currently generating about 0.12 per unit of volatility. If you would invest  598.00  in Orapi SA on September 3, 2024 and sell it today you would earn a total of  52.00  from holding Orapi SA or generate 8.7% return on investment over 90 days.

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

Sensorion SA  vs.  Orapi SA

Sensorion SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sensorion SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Sensorion is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Orapi SA

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Orapi SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Orapi SA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sensorion and Orapi SA

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

The idea behind Sensorion SA and Orapi SA 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.