Correlation Between Orrn Energy and Image Systems
Can any of the company-specific risk be diversified away by investing in both Orrn Energy and Image Systems 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 Orrn Energy and Image Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orrn Energy AB and Image Systems AB, you can compare the effects of market volatilities on Orrn Energy and Image Systems 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 Orrn Energy with a short position of Image Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orrn Energy and Image Systems.
Diversification Opportunities for Orrn Energy and Image Systems
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Orrn and Image is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Orrn Energy AB and Image Systems AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Image Systems AB and Orrn Energy 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 Orrn Energy AB are associated (or correlated) with Image Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Image Systems AB has no effect on the direction of Orrn Energy i.e., Orrn Energy and Image Systems go up and down completely randomly.
Pair Corralation between Orrn Energy and Image Systems
Assuming the 90 days trading horizon Orrn Energy AB is expected to under-perform the Image Systems. But the stock apears to be less risky and, when comparing its historical volatility, Orrn Energy AB is 3.1 times less risky than Image Systems. The stock trades about -0.08 of its potential returns per unit of risk. The Image Systems AB is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 134.00 in Image Systems AB on September 2, 2024 and sell it today you would earn a total of 55.00 from holding Image Systems AB or generate 41.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orrn Energy AB vs. Image Systems AB
Performance |
| Timeline |
| Orrn Energy AB |
| Image Systems AB |
Orrn Energy and Image Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orrn Energy and Image Systems
The main advantage of trading using opposite Orrn Energy and Image Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orrn Energy position performs unexpectedly, Image Systems 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 Image Systems will offset losses from the drop in Image Systems' long position.| Orrn Energy vs. Mekonomen AB | Orrn Energy vs. Embellence Group AB | Orrn Energy vs. AAC Clyde Space | Orrn Energy vs. Africa Oil Corp |
| Image Systems vs. AB SKF | Image Systems vs. Tele2 AB | Image Systems vs. Sandvik AB | Image Systems vs. Skanska AB |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |