Correlation Between Orbit Technologies and EN Shoham

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

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

Diversification Opportunities for Orbit Technologies and EN Shoham

0.95

Correlation Coefficient

Orbit Technologies  EN Shoham

Almost no diversification

The 3 months correlation between Orbit and SHOM is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Orbit Technologies and EN Shoham Business in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EN Shoham Business and Orbit Technologies 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 Orbit Technologies are associated (or correlated) with EN Shoham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EN Shoham Business has no effect on the direction of Orbit Technologies i.e., Orbit Technologies and EN Shoham go up and down completely randomly.

Pair Corralation between Orbit Technologies and EN Shoham

Assuming the 90 days trading horizon Orbit Technologies is expected to generate 1.22 times less return on investment than EN Shoham. In addition to that, Orbit Technologies is 1.17 times more volatile than EN Shoham Business. It trades about 0.27 of its total potential returns per unit of risk. EN Shoham Business is currently generating about 0.38 per unit of volatility. If you would invest  53,360  in EN Shoham Business on September 5, 2024 and sell it today you would earn a total of  16,240  from holding EN Shoham Business or generate 30.43% return on investment over 90 days.

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

Orbit Technologies  vs.  EN Shoham Business

Orbit Technologies

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Orbit Technologies are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Orbit Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

EN Shoham Business

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in EN Shoham Business are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, EN Shoham sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Orbit Technologies and EN Shoham

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

The idea behind Orbit Technologies and EN Shoham Business 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.