Correlation Between Orbitech and Seoyon Topmetal

Can any of the company-specific risk be diversified away by investing in both Orbitech and Seoyon Topmetal 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 Orbitech and Seoyon Topmetal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Orbitech Co and Seoyon Topmetal Co, you can compare the effects of market volatilities on Orbitech and Seoyon Topmetal 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 Orbitech with a short position of Seoyon Topmetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orbitech and Seoyon Topmetal.

Diversification Opportunities for Orbitech and Seoyon Topmetal

0.75

Correlation Coefficient

Orbitech  Seoyon Topmetal

Poor diversification

The 3 months correlation between Orbitech and Seoyon is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Orbitech Co and Seoyon Topmetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoyon Topmetal and Orbitech 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 Orbitech Co are associated (or correlated) with Seoyon Topmetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoyon Topmetal has no effect on the direction of Orbitech i.e., Orbitech and Seoyon Topmetal go up and down completely randomly.

Pair Corralation between Orbitech and Seoyon Topmetal

Assuming the 90 days trading horizon Orbitech Co is expected to under-perform the Seoyon Topmetal. In addition to that, Orbitech is 1.26 times more volatile than Seoyon Topmetal Co. It trades about -0.1 of its total potential returns per unit of risk. Seoyon Topmetal Co is currently generating about -0.03 per unit of volatility. If you would invest  370,000  in Seoyon Topmetal Co on September 28, 2024 and sell it today you would lose (21,500) from holding Seoyon Topmetal Co or give up 5.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Orbitech Co  vs.  Seoyon Topmetal Co

Orbitech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orbitech Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Seoyon Topmetal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seoyon Topmetal Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Seoyon Topmetal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Orbitech and Seoyon Topmetal

The main advantage of trading using opposite Orbitech and Seoyon Topmetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orbitech position performs unexpectedly, Seoyon Topmetal 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 Seoyon Topmetal will offset losses from the drop in Seoyon Topmetal's long position.

The idea behind Orbitech Co and Seoyon Topmetal Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.