Correlation Between Orion Group and Babcock International
Can any of the company-specific risk be diversified away by investing in both Orion Group and Babcock International 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 Group and Babcock International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orion Group Holdings and Babcock International Group, you can compare the effects of market volatilities on Orion Group and Babcock International 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 Group with a short position of Babcock International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orion Group and Babcock International.
Diversification Opportunities for Orion Group and Babcock International
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Orion and Babcock is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Orion Group Holdings and Babcock International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Babcock International and Orion Group 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 Group Holdings are associated (or correlated) with Babcock International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Babcock International has no effect on the direction of Orion Group i.e., Orion Group and Babcock International go up and down completely randomly.
Pair Corralation between Orion Group and Babcock International
Considering the 90-day investment horizon Orion Group Holdings is expected to generate 1.97 times more return on investment than Babcock International. However, Orion Group is 1.97 times more volatile than Babcock International Group. It trades about 0.05 of its potential returns per unit of risk. Babcock International Group is currently generating about 0.01 per unit of risk. If you would invest 696.00 in Orion Group Holdings on September 1, 2024 and sell it today you would earn a total of 176.00 from holding Orion Group Holdings or generate 25.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.95% |
| Values | Daily Returns |
Orion Group Holdings vs. Babcock International Group
Performance |
| Timeline |
| Orion Group Holdings |
| Babcock International |
Orion Group and Babcock International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orion Group and Babcock International
The main advantage of trading using opposite Orion Group and Babcock International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orion Group position performs unexpectedly, Babcock International 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 Babcock International will offset losses from the drop in Babcock International's long position.| Orion Group vs. MYR Group | Orion Group vs. Granite Construction Incorporated | Orion Group vs. Construction Partners | Orion Group vs. Great Lakes Dredge |
| Babcock International vs. Orion Group Holdings | Babcock International vs. Agrify Corp | Babcock International vs. Matrix Service Co | Babcock International vs. MYR Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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