Correlation Between Orbit Technologies and TAT Technologies
Can any of the company-specific risk be diversified away by investing in both Orbit Technologies and TAT Technologies 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 TAT Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orbit Technologies and TAT Technologies, you can compare the effects of market volatilities on Orbit Technologies and TAT Technologies 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 TAT Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orbit Technologies and TAT Technologies.
Diversification Opportunities for Orbit Technologies and TAT Technologies
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Orbit and TAT is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Orbit Technologies and TAT Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAT Technologies 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 TAT Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAT Technologies has no effect on the direction of Orbit Technologies i.e., Orbit Technologies and TAT Technologies go up and down completely randomly.
Pair Corralation between Orbit Technologies and TAT Technologies
Assuming the 90 days trading horizon Orbit Technologies is expected to generate 1.5 times less return on investment than TAT Technologies. But when comparing it to its historical volatility, Orbit Technologies is 2.16 times less risky than TAT Technologies. It trades about 0.26 of its potential returns per unit of risk. TAT Technologies is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 699,100 in TAT Technologies on August 25, 2024 and sell it today you would earn a total of 82,000 from holding TAT Technologies or generate 11.73% 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. TAT Technologies
Performance |
| Timeline |
| Orbit Technologies |
| TAT Technologies |
Orbit Technologies and TAT Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orbit Technologies and TAT Technologies
The main advantage of trading using opposite Orbit Technologies and TAT Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orbit Technologies position performs unexpectedly, TAT Technologies 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 TAT Technologies will offset losses from the drop in TAT Technologies' long position.| Orbit Technologies vs. Elbit Systems | Orbit Technologies vs. Bet Shemesh Engines | Orbit Technologies vs. Maytronics | Orbit Technologies vs. Bezeq Israeli Telecommunication |
| TAT Technologies vs. Orbit Technologies | TAT Technologies vs. Tower Semiconductor | TAT Technologies vs. Elron Electronic Industries | TAT Technologies vs. Elbit Systems |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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