Correlation Between Arcadis NV and Orion Group

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

By analyzing existing cross correlation between Arcadis NV and Orion Group Holdings, you can compare the effects of market volatilities on Arcadis NV and Orion Group 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 Arcadis NV with a short position of Orion Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcadis NV and Orion Group.

Diversification Opportunities for Arcadis NV and Orion Group

0.64

Correlation Coefficient

Arcadis NV  Orion Group

Poor diversification

The 3 months correlation between Arcadis and Orion is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Arcadis NV and Orion Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orion Group Holdings and Arcadis NV 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 Arcadis NV are associated (or correlated) with Orion Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orion Group Holdings has no effect on the direction of Arcadis NV i.e., Arcadis NV and Orion Group go up and down completely randomly.

Pair Corralation between Arcadis NV and Orion Group

Assuming the 90 days horizon Arcadis NV is expected to under-perform the Orion Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, Arcadis NV is 3.19 times less risky than Orion Group. The pink sheet trades about -0.25 of its potential returns per unit of risk. The Orion Group Holdings is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  768.00  in Orion Group Holdings on December 20, 2024 and sell it today you would lose (167.00) from holding Orion Group Holdings or give up 21.74% of portfolio value over 90 days.

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

Arcadis NV  vs.  Orion Group Holdings

Arcadis NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arcadis NV 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 nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Orion Group Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Orion Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Arcadis NV and Orion Group

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

The idea behind Arcadis NV and Orion Group Holdings 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.