Correlation Between Orion Group and China State
Can any of the company-specific risk be diversified away by investing in both Orion Group and China State 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 China State 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 China State Construction, you can compare the effects of market volatilities on Orion Group and China State 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 China State. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orion Group and China State.
Diversification Opportunities for Orion Group and China State
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Orion and China is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Orion Group Holdings and China State Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China State Construction 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 China State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China State Construction has no effect on the direction of Orion Group i.e., Orion Group and China State go up and down completely randomly.
Pair Corralation between Orion Group and China State
Considering the 90-day investment horizon Orion Group Holdings is expected to generate 0.9 times more return on investment than China State. However, Orion Group Holdings is 1.11 times less risky than China State. It trades about 0.44 of its potential returns per unit of risk. China State Construction is currently generating about -0.21 per unit of risk. If you would invest 542.00 in Orion Group Holdings on August 31, 2024 and sell it today you would earn a total of 335.00 from holding Orion Group Holdings or generate 61.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orion Group Holdings vs. China State Construction
Performance |
| Timeline |
| Orion Group Holdings |
| China State Construction |
Orion Group and China State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orion Group and China State
The main advantage of trading using opposite Orion Group and China State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orion Group position performs unexpectedly, China State 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 China State will offset losses from the drop in China State'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 |
| China State vs. Orion Group Holdings | China State vs. Agrify Corp | China State vs. Matrix Service Co | China State 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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