Correlation Between Orange SA and Stewart Information
Can any of the company-specific risk be diversified away by investing in both Orange SA and Stewart Information 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 Orange SA and Stewart Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orange SA and Stewart Information Services, you can compare the effects of market volatilities on Orange SA and Stewart Information 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 Orange SA with a short position of Stewart Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orange SA and Stewart Information.
Diversification Opportunities for Orange SA and Stewart Information
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Orange and Stewart is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Orange SA and Stewart Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stewart Information and Orange 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 Orange SA are associated (or correlated) with Stewart Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stewart Information has no effect on the direction of Orange SA i.e., Orange SA and Stewart Information go up and down completely randomly.
Pair Corralation between Orange SA and Stewart Information
Assuming the 90 days horizon Orange SA is expected to under-perform the Stewart Information. But the stock apears to be less risky and, when comparing its historical volatility, Orange SA is 2.21 times less risky than Stewart Information. The stock trades about -0.01 of its potential returns per unit of risk. The Stewart Information Services is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 6,350 in Stewart Information Services on September 1, 2024 and sell it today you would earn a total of 550.00 from holding Stewart Information Services or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Orange SA vs. Stewart Information Services
Performance |
| Timeline |
| Orange SA |
| Stewart Information |
Orange SA and Stewart Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orange SA and Stewart Information
The main advantage of trading using opposite Orange SA and Stewart Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orange SA position performs unexpectedly, Stewart Information 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 Stewart Information will offset losses from the drop in Stewart Information's long position.| Orange SA vs. REINET INVESTMENTS SCA | Orange SA vs. DIVERSIFIED ROYALTY | Orange SA vs. PennantPark Investment | Orange SA vs. MGIC INVESTMENT |
| Stewart Information vs. Singapore Telecommunications Limited | Stewart Information vs. Harmony Gold Mining | Stewart Information vs. Verizon Communications | Stewart Information vs. Chesapeake Utilities |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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