Correlation Between Orbit Technologies and AudioCodes
Can any of the company-specific risk be diversified away by investing in both Orbit Technologies and AudioCodes 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 Orbit Technologies and AudioCodes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orbit Technologies and AudioCodes, you can compare the effects of market volatilities on Orbit Technologies and AudioCodes 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 Orbit Technologies with a short position of AudioCodes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orbit Technologies and AudioCodes.
Diversification Opportunities for Orbit Technologies and AudioCodes
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Orbit and AudioCodes is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Orbit Technologies and AudioCodes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AudioCodes and Orbit Technologies 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 Orbit Technologies are associated (or correlated) with AudioCodes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AudioCodes has no effect on the direction of Orbit Technologies i.e., Orbit Technologies and AudioCodes go up and down completely randomly.
Pair Corralation between Orbit Technologies and AudioCodes
Assuming the 90 days trading horizon Orbit Technologies is expected to generate 0.56 times more return on investment than AudioCodes. However, Orbit Technologies is 1.78 times less risky than AudioCodes. It trades about 0.3 of its potential returns per unit of risk. AudioCodes is currently generating about -0.05 per unit of risk. If you would invest 249,300 in Orbit Technologies on August 29, 2024 and sell it today you would earn a total of 26,800 from holding Orbit Technologies or generate 10.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orbit Technologies vs. AudioCodes
Performance |
| Timeline |
| Orbit Technologies |
| AudioCodes |
Orbit Technologies and AudioCodes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orbit Technologies and AudioCodes
The main advantage of trading using opposite Orbit Technologies and AudioCodes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orbit Technologies position performs unexpectedly, AudioCodes 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 AudioCodes will offset losses from the drop in AudioCodes' long position.| Orbit Technologies vs. Elbit Systems | Orbit Technologies vs. Bet Shemesh Engines | Orbit Technologies vs. Maytronics | Orbit Technologies vs. Bezeq Israeli Telecommunication |
| AudioCodes vs. Nice | AudioCodes vs. Tower Semiconductor | AudioCodes vs. Elbit Systems | AudioCodes vs. Nova |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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