Correlation Between Chase and Orion Engineered

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

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

Diversification Opportunities for Chase and Orion Engineered

-0.18

Correlation Coefficient

Chase  Orion Engineered

Good diversification

The 3 months correlation between Chase and Orion is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Chase and Orion Engineered Carbons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orion Engineered Carbons and Chase 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 Chase are associated (or correlated) with Orion Engineered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orion Engineered Carbons has no effect on the direction of Chase i.e., Chase and Orion Engineered go up and down completely randomly.

Pair Corralation between Chase and Orion Engineered

If you would invest  1,777  in Orion Engineered Carbons on September 2, 2024 and sell it today you would earn a total of  65.00  from holding Orion Engineered Carbons or generate 3.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Chase  vs.  Orion Engineered Carbons

Chase

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chase has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Chase is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Orion Engineered Carbons

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Orion Engineered Carbons are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Orion Engineered may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Chase and Orion Engineered

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

The idea behind Chase and Orion Engineered Carbons 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.