Correlation Between Orion Energy and Ethan Allen
Can any of the company-specific risk be diversified away by investing in both Orion Energy and Ethan Allen 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 Energy and Ethan Allen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orion Energy Systems and Ethan Allen Interiors, you can compare the effects of market volatilities on Orion Energy and Ethan Allen 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 Energy with a short position of Ethan Allen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orion Energy and Ethan Allen.
Diversification Opportunities for Orion Energy and Ethan Allen
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Orion and Ethan is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Orion Energy Systems and Ethan Allen Interiors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethan Allen Interiors and Orion Energy 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 Energy Systems are associated (or correlated) with Ethan Allen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethan Allen Interiors has no effect on the direction of Orion Energy i.e., Orion Energy and Ethan Allen go up and down completely randomly.
Pair Corralation between Orion Energy and Ethan Allen
Given the investment horizon of 90 days Orion Energy Systems is expected to under-perform the Ethan Allen. In addition to that, Orion Energy is 1.57 times more volatile than Ethan Allen Interiors. It trades about -0.29 of its total potential returns per unit of risk. Ethan Allen Interiors is currently generating about 0.06 per unit of volatility. If you would invest 2,938 in Ethan Allen Interiors on August 27, 2024 and sell it today you would earn a total of 55.00 from holding Ethan Allen Interiors or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orion Energy Systems vs. Ethan Allen Interiors
Performance |
| Timeline |
| Orion Energy Systems |
| Ethan Allen Interiors |
Orion Energy and Ethan Allen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orion Energy and Ethan Allen
The main advantage of trading using opposite Orion Energy and Ethan Allen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orion Energy position performs unexpectedly, Ethan Allen 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 Ethan Allen will offset losses from the drop in Ethan Allen's long position.| Orion Energy vs. Polar Power | Orion Energy vs. CBAK Energy Technology | Orion Energy vs. Pioneer Power Solutions | Orion Energy vs. Lightbridge Corp |
| Ethan Allen vs. Willis Lease Finance | Ethan Allen vs. Rocky Brands | Ethan Allen vs. First Business Financial |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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