Correlation Between Vinci SA and Orion Group

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Can any of the company-specific risk be diversified away by investing in both Vinci SA and Orion Group 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 Vinci SA and Orion Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vinci SA ADR and Orion Group Holdings, you can compare the effects of market volatilities on Vinci SA and Orion Group 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 Vinci SA with a short position of Orion Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vinci SA and Orion Group.

Diversification Opportunities for Vinci SA and Orion Group

-0.66
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Vinci and Orion is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Vinci SA ADR and Orion Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orion Group Holdings and Vinci SA 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 Vinci SA ADR are associated (or correlated) with Orion Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orion Group Holdings has no effect on the direction of Vinci SA i.e., Vinci SA and Orion Group go up and down completely randomly.

Pair Corralation between Vinci SA and Orion Group

Assuming the 90 days horizon Vinci SA ADR is expected to under-perform the Orion Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, Vinci SA ADR is 3.12 times less risky than Orion Group. The pink sheet trades about -0.14 of its potential returns per unit of risk. The Orion Group Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  691.00  in Orion Group Holdings on September 3, 2024 and sell it today you would earn a total of  181.00  from holding Orion Group Holdings or generate 26.19% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Vinci SA ADR  vs.  Orion Group Holdings

 Performance 
       Timeline  
Vinci SA ADR 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Vinci SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly 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.
Orion Group Holdings 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Orion Group Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Orion Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Vinci SA and Orion Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Vinci SA and Orion Group

The main advantage of trading using opposite Vinci SA and Orion Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vinci SA position performs unexpectedly, Orion Group 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 Group will offset losses from the drop in Orion Group's long position.
The idea behind Vinci SA ADR and Orion Group Holdings 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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