Correlation Between Flexsteel Industries and Orion Energy
Can any of the company-specific risk be diversified away by investing in both Flexsteel Industries and Orion Energy 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 Flexsteel Industries and Orion Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexsteel Industries and Orion Energy Systems, you can compare the effects of market volatilities on Flexsteel Industries and Orion Energy 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 Flexsteel Industries with a short position of Orion Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexsteel Industries and Orion Energy.
Diversification Opportunities for Flexsteel Industries and Orion Energy
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flexsteel and Orion is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Flexsteel Industries and Orion Energy Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orion Energy Systems and Flexsteel Industries 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 Flexsteel Industries are associated (or correlated) with Orion Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orion Energy Systems has no effect on the direction of Flexsteel Industries i.e., Flexsteel Industries and Orion Energy go up and down completely randomly.
Pair Corralation between Flexsteel Industries and Orion Energy
Given the investment horizon of 90 days Flexsteel Industries is expected to generate 0.82 times more return on investment than Orion Energy. However, Flexsteel Industries is 1.23 times less risky than Orion Energy. It trades about 0.06 of its potential returns per unit of risk. Orion Energy Systems is currently generating about -0.31 per unit of risk. If you would invest 5,802 in Flexsteel Industries on August 28, 2024 and sell it today you would earn a total of 135.00 from holding Flexsteel Industries or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexsteel Industries vs. Orion Energy Systems
Performance |
| Timeline |
| Flexsteel Industries |
| Orion Energy Systems |
Flexsteel Industries and Orion Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexsteel Industries and Orion Energy
The main advantage of trading using opposite Flexsteel Industries and Orion Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexsteel Industries position performs unexpectedly, Orion Energy 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 Energy will offset losses from the drop in Orion Energy's long position.| Flexsteel Industries vs. Willis Lease Finance | Flexsteel Industries vs. Rocky Brands | Flexsteel Industries vs. First Business Financial |
| Orion Energy vs. Polar Power | Orion Energy vs. CBAK Energy Technology | Orion Energy vs. Pioneer Power Solutions | Orion Energy vs. Lightbridge Corp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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