Correlation Between Orinko Advanced and NBTM New
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By analyzing existing cross correlation between Orinko Advanced Plastics and NBTM New Materials, you can compare the effects of market volatilities on Orinko Advanced and NBTM New 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 Orinko Advanced with a short position of NBTM New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orinko Advanced and NBTM New.
Diversification Opportunities for Orinko Advanced and NBTM New
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Orinko and NBTM is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Orinko Advanced Plastics and NBTM New Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBTM New Materials and Orinko Advanced 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 Orinko Advanced Plastics are associated (or correlated) with NBTM New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBTM New Materials has no effect on the direction of Orinko Advanced i.e., Orinko Advanced and NBTM New go up and down completely randomly.
Pair Corralation between Orinko Advanced and NBTM New
Assuming the 90 days trading horizon Orinko Advanced is expected to generate 2.7 times less return on investment than NBTM New. But when comparing it to its historical volatility, Orinko Advanced Plastics is 1.36 times less risky than NBTM New. It trades about 0.24 of its potential returns per unit of risk. NBTM New Materials is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 1,536 in NBTM New Materials on November 9, 2024 and sell it today you would earn a total of 480.00 from holding NBTM New Materials or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orinko Advanced Plastics vs. NBTM New Materials
Performance |
| Timeline |
| Orinko Advanced Plastics |
Risk-Adjusted Performance
OK
Weak | Strong |
| NBTM New Materials |
Risk-Adjusted Performance
Modest
Weak | Strong |
Orinko Advanced and NBTM New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orinko Advanced and NBTM New
The main advantage of trading using opposite Orinko Advanced and NBTM New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orinko Advanced position performs unexpectedly, NBTM New 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 NBTM New will offset losses from the drop in NBTM New's long position.The idea behind Orinko Advanced Plastics and NBTM New Materials 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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