Correlation Between Fluor and Orion Group
Can any of the company-specific risk be diversified away by investing in both Fluor 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 Fluor and Orion Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluor and Orion Group Holdings, you can compare the effects of market volatilities on Fluor 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 Fluor with a short position of Orion Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluor and Orion Group.
Diversification Opportunities for Fluor and Orion Group
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fluor and Orion is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Fluor 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 Fluor 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 Fluor 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 Fluor i.e., Fluor and Orion Group go up and down completely randomly.
Pair Corralation between Fluor and Orion Group
Considering the 90-day investment horizon Fluor is expected to generate 0.46 times more return on investment than Orion Group. However, Fluor is 2.17 times less risky than Orion Group. It trades about 0.1 of its potential returns per unit of risk. Orion Group Holdings is currently generating about 0.01 per unit of risk. If you would invest 4,360 in Fluor on September 1, 2024 and sell it today you would earn a total of 1,253 from holding Fluor or generate 28.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fluor vs. Orion Group Holdings
Performance |
| Timeline |
| Fluor |
| Orion Group Holdings |
Fluor and Orion Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluor and Orion Group
The main advantage of trading using opposite Fluor and Orion Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluor 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 Fluor 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.| Orion Group vs. MYR Group | Orion Group vs. Granite Construction Incorporated | Orion Group vs. Construction Partners | Orion Group vs. Great Lakes Dredge |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |