Correlation Between Wang Lee and Orion Group

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

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

Diversification Opportunities for Wang Lee and Orion Group

0.7

Correlation Coefficient

Wang Lee  Orion Group

Poor diversification

The 3 months correlation between Wang and Orion is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Wang Lee Group, 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 Wang Lee 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 Wang Lee Group, 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 Wang Lee i.e., Wang Lee and Orion Group go up and down completely randomly.

Pair Corralation between Wang Lee and Orion Group

Given the investment horizon of 90 days Wang Lee Group, is expected to under-perform the Orion Group. In addition to that, Wang Lee is 4.86 times more volatile than Orion Group Holdings. It trades about -0.19 of its total potential returns per unit of risk. Orion Group Holdings is currently generating about -0.16 per unit of volatility. If you would invest  855.00  in Orion Group Holdings on September 23, 2024 and sell it today you would lose (87.00) from holding Orion Group Holdings or give up 10.18% of portfolio value over 90 days.

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

Wang Lee Group,  vs.  Orion Group Holdings

Wang Lee Group,

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wang Lee Group, are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Wang Lee unveiled solid returns over the last few months and may actually be approaching a breakup point.

Orion Group Holdings

Risk-Adjusted Performance

8 of 100

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.

Pair Trading with Wang Lee and Orion Group

The main advantage of trading using opposite Wang Lee and Orion Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wang Lee 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 Wang Lee Group, 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.