Correlation Between Cadeler AS and Orion Group

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

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

Diversification Opportunities for Cadeler AS and Orion Group

0.4

Correlation Coefficient

Cadeler AS  Orion Group

Very weak diversification

The 3 months correlation between Cadeler and Orion is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cadeler AS 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 Cadeler AS 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 Cadeler AS 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 Cadeler AS i.e., Cadeler AS and Orion Group go up and down completely randomly.

Pair Corralation between Cadeler AS and Orion Group

Given the investment horizon of 90 days Cadeler AS is expected to generate 0.49 times more return on investment than Orion Group. However, Cadeler AS is 2.05 times less risky than Orion Group. It trades about -0.05 of its potential returns per unit of risk. Orion Group Holdings is currently generating about -0.09 per unit of risk. If you would invest  2,260  in Cadeler AS on December 29, 2024 and sell it today you would lose (197.00) from holding Cadeler AS or give up 8.72% of portfolio value over 90 days.

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

Cadeler AS  vs.  Orion Group Holdings

Cadeler AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cadeler AS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's essential indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

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 Cadeler AS and Orion Group

The main advantage of trading using opposite Cadeler AS and Orion Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadeler AS 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 Cadeler AS 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.