Correlation Between Orbit Technologies and Multi Retail
Can any of the company-specific risk be diversified away by investing in both Orbit Technologies and Multi Retail 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 Multi Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orbit Technologies and Multi Retail Group, you can compare the effects of market volatilities on Orbit Technologies and Multi Retail 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 Multi Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orbit Technologies and Multi Retail.
Diversification Opportunities for Orbit Technologies and Multi Retail
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Orbit and Multi is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Orbit Technologies and Multi Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Retail Group 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 Multi Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Retail Group has no effect on the direction of Orbit Technologies i.e., Orbit Technologies and Multi Retail go up and down completely randomly.
Pair Corralation between Orbit Technologies and Multi Retail
Assuming the 90 days trading horizon Orbit Technologies is expected to generate 3.54 times less return on investment than Multi Retail. But when comparing it to its historical volatility, Orbit Technologies is 2.35 times less risky than Multi Retail. It trades about 0.31 of its potential returns per unit of risk. Multi Retail Group is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 58,950 in Multi Retail Group on August 30, 2024 and sell it today you would earn a total of 45,350 from holding Multi Retail Group or generate 76.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orbit Technologies vs. Multi Retail Group
Performance |
| Timeline |
| Orbit Technologies |
| Multi Retail Group |
Orbit Technologies and Multi Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orbit Technologies and Multi Retail
The main advantage of trading using opposite Orbit Technologies and Multi Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orbit Technologies position performs unexpectedly, Multi Retail 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 Multi Retail will offset losses from the drop in Multi Retail's long position.| Orbit Technologies vs. Ormat Technologies | Orbit Technologies vs. Multi Retail Group | Orbit Technologies vs. Nova | Orbit Technologies vs. B Communications |
| Multi Retail vs. Opal Balance | Multi Retail vs. B Communications | Multi Retail vs. Holmes Place International | Multi Retail 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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