Correlation Between Orion Group and ENGlobal
Can any of the company-specific risk be diversified away by investing in both Orion Group and ENGlobal 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 ENGlobal 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 ENGlobal, you can compare the effects of market volatilities on Orion Group and ENGlobal 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 ENGlobal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orion Group and ENGlobal.
Diversification Opportunities for Orion Group and ENGlobal
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Orion and ENGlobal is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Orion Group Holdings and ENGlobal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENGlobal 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 ENGlobal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENGlobal has no effect on the direction of Orion Group i.e., Orion Group and ENGlobal go up and down completely randomly.
Pair Corralation between Orion Group and ENGlobal
Considering the 90-day investment horizon Orion Group Holdings is expected to generate 0.96 times more return on investment than ENGlobal. However, Orion Group Holdings is 1.05 times less risky than ENGlobal. It trades about 0.24 of its potential returns per unit of risk. ENGlobal is currently generating about 0.05 per unit of risk. If you would invest 577.00 in Orion Group Holdings on August 30, 2024 and sell it today you would earn a total of 300.00 from holding Orion Group Holdings or generate 51.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Orion Group Holdings vs. ENGlobal
Performance |
| Timeline |
| Orion Group Holdings |
| ENGlobal |
Orion Group and ENGlobal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orion Group and ENGlobal
The main advantage of trading using opposite Orion Group and ENGlobal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orion Group position performs unexpectedly, ENGlobal 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 ENGlobal will offset losses from the drop in ENGlobal'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 |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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