Correlation Between Orion Energy and RF Industries
Can any of the company-specific risk be diversified away by investing in both Orion Energy and RF Industries 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 RF Industries 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 RF Industries, you can compare the effects of market volatilities on Orion Energy and RF Industries 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 RF Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orion Energy and RF Industries.
Diversification Opportunities for Orion Energy and RF Industries
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Orion and RFIL is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Orion Energy Systems and RF Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RF Industries 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 RF Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RF Industries has no effect on the direction of Orion Energy i.e., Orion Energy and RF Industries go up and down completely randomly.
Pair Corralation between Orion Energy and RF Industries
Given the investment horizon of 90 days Orion Energy Systems is expected to under-perform the RF Industries. In addition to that, Orion Energy is 1.67 times more volatile than RF Industries. It trades about -0.23 of its total potential returns per unit of risk. RF Industries is currently generating about 0.0 per unit of volatility. If you would invest 412.00 in RF Industries on August 31, 2024 and sell it today you would lose (1.00) from holding RF Industries or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orion Energy Systems vs. RF Industries
Performance |
| Timeline |
| Orion Energy Systems |
| RF Industries |
Orion Energy and RF Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orion Energy and RF Industries
The main advantage of trading using opposite Orion Energy and RF Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orion Energy position performs unexpectedly, RF Industries 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 RF Industries will offset losses from the drop in RF Industries' long position.| Orion Energy vs. Plug Power | Orion Energy vs. FREYR Battery SA | Orion Energy vs. FuelCell Energy | Orion Energy vs. Enovix Corp |
| RF Industries vs. Hayward Holdings | RF Industries vs. Enersys | RF Industries vs. Espey Mfg Electronics | RF Industries vs. Advanced Energy Industries |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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