Correlation Between Orange SA and SITO Mobile
Can any of the company-specific risk be diversified away by investing in both Orange SA and SITO Mobile 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 Orange SA and SITO Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orange SA ADR and SITO Mobile, you can compare the effects of market volatilities on Orange SA and SITO Mobile 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 Orange SA with a short position of SITO Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orange SA and SITO Mobile.
Diversification Opportunities for Orange SA and SITO Mobile
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Orange and SITO is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Orange SA ADR and SITO Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SITO Mobile and Orange SA 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 Orange SA ADR are associated (or correlated) with SITO Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SITO Mobile has no effect on the direction of Orange SA i.e., Orange SA and SITO Mobile go up and down completely randomly.
Pair Corralation between Orange SA and SITO Mobile
Given the investment horizon of 90 days Orange SA is expected to generate 162.98 times less return on investment than SITO Mobile. But when comparing it to its historical volatility, Orange SA ADR is 26.65 times less risky than SITO Mobile. It trades about 0.04 of its potential returns per unit of risk. SITO Mobile is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 0.03 in SITO Mobile on August 31, 2024 and sell it today you would earn a total of 0.18 from holding SITO Mobile or generate 600.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 8.08% |
| Values | Daily Returns |
Orange SA ADR vs. SITO Mobile
Performance |
| Timeline |
| Orange SA ADR |
| SITO Mobile |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Orange SA and SITO Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orange SA and SITO Mobile
The main advantage of trading using opposite Orange SA and SITO Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orange SA position performs unexpectedly, SITO Mobile 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 SITO Mobile will offset losses from the drop in SITO Mobile's long position.| Orange SA vs. Telefonica Brasil SA | Orange SA vs. Vodafone Group PLC | Orange SA vs. Grupo Televisa SAB | Orange SA vs. America Movil SAB |
| SITO Mobile vs. Tele2 AB | SITO Mobile vs. Crexendo | SITO Mobile vs. Telefonica Brasil SA | SITO Mobile vs. Orange SA ADR |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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