Correlation Between Orion Energy and Polar Power
Can any of the company-specific risk be diversified away by investing in both Orion Energy and Polar Power 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 Polar Power 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 Polar Power, you can compare the effects of market volatilities on Orion Energy and Polar Power 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 Polar Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orion Energy and Polar Power.
Diversification Opportunities for Orion Energy and Polar Power
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Orion and Polar is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Orion Energy Systems and Polar Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Power 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 Polar Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Power has no effect on the direction of Orion Energy i.e., Orion Energy and Polar Power go up and down completely randomly.
Pair Corralation between Orion Energy and Polar Power
Given the investment horizon of 90 days Orion Energy Systems is expected to under-perform the Polar Power. But the stock apears to be less risky and, when comparing its historical volatility, Orion Energy Systems is 2.63 times less risky than Polar Power. The stock trades about -0.23 of its potential returns per unit of risk. The Polar Power is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 314.00 in Polar Power on August 31, 2024 and sell it today you would lose (27.00) from holding Polar Power or give up 8.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orion Energy Systems vs. Polar Power
Performance |
| Timeline |
| Orion Energy Systems |
| Polar Power |
Orion Energy and Polar Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orion Energy and Polar Power
The main advantage of trading using opposite Orion Energy and Polar Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orion Energy position performs unexpectedly, Polar Power 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 Polar Power will offset losses from the drop in Polar Power's long position.| Orion Energy vs. Plug Power | Orion Energy vs. FREYR Battery SA | Orion Energy vs. FuelCell Energy | Orion Energy vs. Enovix Corp |
| Polar Power vs. CBAK Energy Technology | Polar Power vs. Ocean Power Technologies | Polar Power vs. Enersys | Polar Power vs. Flux Power Holdings |
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 CEOs Directory module to screen CEOs from public companies around the world.
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