Correlation Between Orion Engineered and Core Molding
Can any of the company-specific risk be diversified away by investing in both Orion Engineered and Core Molding 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 Core Molding 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 Core Molding Technologies, you can compare the effects of market volatilities on Orion Engineered and Core Molding 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 Core Molding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orion Engineered and Core Molding.
Diversification Opportunities for Orion Engineered and Core Molding
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Orion and Core is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Orion Engineered Carbons and Core Molding Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Molding Technologies 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 Core Molding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Molding Technologies has no effect on the direction of Orion Engineered i.e., Orion Engineered and Core Molding go up and down completely randomly.
Pair Corralation between Orion Engineered and Core Molding
Considering the 90-day investment horizon Orion Engineered Carbons is expected to under-perform the Core Molding. In addition to that, Orion Engineered is 1.23 times more volatile than Core Molding Technologies. It trades about -0.2 of its total potential returns per unit of risk. Core Molding Technologies is currently generating about -0.15 per unit of volatility. If you would invest 1,560 in Core Molding Technologies on November 3, 2024 and sell it today you would lose (83.00) from holding Core Molding Technologies or give up 5.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orion Engineered Carbons vs. Core Molding Technologies
Performance |
| Timeline |
| Orion Engineered Carbons |
| Core Molding Technologies |
Orion Engineered and Core Molding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orion Engineered and Core Molding
The main advantage of trading using opposite Orion Engineered and Core Molding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orion Engineered position performs unexpectedly, Core Molding 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 Core Molding will offset losses from the drop in Core Molding's long position.| Orion Engineered vs. Innospec | Orion Engineered vs. H B Fuller | Orion Engineered vs. Quaker Chemical | Orion Engineered vs. Minerals Technologies |
| Core Molding vs. Innospec | Core Molding vs. H B Fuller | Core Molding vs. Quaker Chemical | Core Molding vs. Minerals Technologies |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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