Correlation Between Orion Engineered and Air France
Can any of the company-specific risk be diversified away by investing in both Orion Engineered and Air France 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 Orion Engineered and Air France into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orion Engineered Carbons and Air France KLM, you can compare the effects of market volatilities on Orion Engineered and Air France 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 Orion Engineered with a short position of Air France. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orion Engineered and Air France.
Diversification Opportunities for Orion Engineered and Air France
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Orion and Air is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Orion Engineered Carbons and Air France KLM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air France KLM and Orion Engineered 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 Orion Engineered Carbons are associated (or correlated) with Air France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air France KLM has no effect on the direction of Orion Engineered i.e., Orion Engineered and Air France go up and down completely randomly.
Pair Corralation between Orion Engineered and Air France
Considering the 90-day investment horizon Orion Engineered Carbons is expected to generate 1.51 times more return on investment than Air France. However, Orion Engineered is 1.51 times more volatile than Air France KLM. It trades about 0.23 of its potential returns per unit of risk. Air France KLM is currently generating about -0.33 per unit of risk. If you would invest 1,527 in Orion Engineered Carbons on August 31, 2024 and sell it today you would earn a total of 312.00 from holding Orion Engineered Carbons or generate 20.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orion Engineered Carbons vs. Air France KLM
Performance |
| Timeline |
| Orion Engineered Carbons |
| Air France KLM |
Orion Engineered and Air France Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orion Engineered and Air France
The main advantage of trading using opposite Orion Engineered and Air France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orion Engineered position performs unexpectedly, Air France 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 Air France will offset losses from the drop in Air France's long position.| Orion Engineered vs. Innospec | Orion Engineered vs. H B Fuller | Orion Engineered vs. Quaker Chemical | Orion Engineered vs. Minerals Technologies |
| Air France vs. Seychelle Environmtl | Air France vs. Energy and Water | Air France vs. One World Universe | Air France vs. Vow ASA |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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