Correlation Between Orion Group and Bilfinger
Can any of the company-specific risk be diversified away by investing in both Orion Group and Bilfinger 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 Bilfinger 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 Bilfinger SE ADR, you can compare the effects of market volatilities on Orion Group and Bilfinger 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 Bilfinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orion Group and Bilfinger.
Diversification Opportunities for Orion Group and Bilfinger
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Orion and Bilfinger is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Orion Group Holdings and Bilfinger SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilfinger SE ADR 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 Bilfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilfinger SE ADR has no effect on the direction of Orion Group i.e., Orion Group and Bilfinger go up and down completely randomly.
Pair Corralation between Orion Group and Bilfinger
Considering the 90-day investment horizon Orion Group Holdings is expected to generate 2.55 times more return on investment than Bilfinger. However, Orion Group is 2.55 times more volatile than Bilfinger SE ADR. It trades about 0.37 of its potential returns per unit of risk. Bilfinger SE ADR is currently generating about -0.32 per unit of risk. If you would invest 611.00 in Orion Group Holdings on September 1, 2024 and sell it today you would earn a total of 261.00 from holding Orion Group Holdings or generate 42.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orion Group Holdings vs. Bilfinger SE ADR
Performance |
| Timeline |
| Orion Group Holdings |
| Bilfinger SE ADR |
Orion Group and Bilfinger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orion Group and Bilfinger
The main advantage of trading using opposite Orion Group and Bilfinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orion Group position performs unexpectedly, Bilfinger 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 Bilfinger will offset losses from the drop in Bilfinger'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 |
| Bilfinger vs. Orion Group Holdings | Bilfinger vs. Agrify Corp | Bilfinger vs. Matrix Service Co | Bilfinger 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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