Correlation Between Rimon Consulting and Orbit Technologies

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

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

Diversification Opportunities for Rimon Consulting and Orbit Technologies

0.91

Correlation Coefficient

Rimon Consulting  Orbit Technologies

Almost no diversification

The 3 months correlation between Rimon and Orbit is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Rimon Consulting Management and Orbit Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbit Technologies and Rimon Consulting 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 Rimon Consulting Management are associated (or correlated) with Orbit Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbit Technologies has no effect on the direction of Rimon Consulting i.e., Rimon Consulting and Orbit Technologies go up and down completely randomly.

Pair Corralation between Rimon Consulting and Orbit Technologies

Assuming the 90 days trading horizon Rimon Consulting Management is expected to generate 1.34 times more return on investment than Orbit Technologies. However, Rimon Consulting is 1.34 times more volatile than Orbit Technologies. It trades about 0.16 of its potential returns per unit of risk. Orbit Technologies is currently generating about 0.19 per unit of risk. If you would invest  292,200  in Rimon Consulting Management on September 29, 2024 and sell it today you would earn a total of  132,800  from holding Rimon Consulting Management or generate 45.45% return on investment over 90 days.

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

Rimon Consulting Management  vs.  Orbit Technologies

Rimon Consulting Man

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rimon Consulting Management are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Rimon Consulting sustained solid returns over the last few months and may actually be approaching a breakup point.

Orbit Technologies

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Orbit Technologies are ranked lower than 27 (%) 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.

Pair Trading with Rimon Consulting and Orbit Technologies

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

The idea behind Rimon Consulting Management and Orbit Technologies 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.