Correlation Between Orbitech and CS BEARING

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

By analyzing existing cross correlation between Orbitech Co and CS BEARING CoLtd, you can compare the effects of market volatilities on Orbitech and CS BEARING 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 CS BEARING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orbitech and CS BEARING.

Diversification Opportunities for Orbitech and CS BEARING

0.38

Correlation Coefficient

Orbitech  CS BEARING

Weak diversification

The 3 months correlation between Orbitech and 297090 is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Orbitech Co and CS BEARING CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CS BEARING CoLtd 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 CS BEARING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CS BEARING CoLtd has no effect on the direction of Orbitech i.e., Orbitech and CS BEARING go up and down completely randomly.

Pair Corralation between Orbitech and CS BEARING

Assuming the 90 days trading horizon Orbitech Co is expected to under-perform the CS BEARING. But the stock apears to be less risky and, when comparing its historical volatility, Orbitech Co is 1.14 times less risky than CS BEARING. The stock trades about -0.04 of its potential returns per unit of risk. The CS BEARING CoLtd is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  877,000  in CS BEARING CoLtd on October 10, 2024 and sell it today you would lose (307,000) from holding CS BEARING CoLtd or give up 35.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Orbitech Co  vs.  CS BEARING CoLtd

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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

CS BEARING CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CS BEARING CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CS BEARING 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 CS BEARING

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

The idea behind Orbitech Co and CS BEARING CoLtd 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.