Correlation Between Crown Electrokinetics and Orica

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

By analyzing existing cross correlation between Crown Electrokinetics Corp and Orica Ltd ADR, you can compare the effects of market volatilities on Crown Electrokinetics and Orica 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 Crown Electrokinetics with a short position of Orica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Electrokinetics and Orica.

Diversification Opportunities for Crown Electrokinetics and Orica

-0.09

Correlation Coefficient

Crown Electrokinetics  Orica

Good diversification

The 3 months correlation between Crown and Orica is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Crown Electrokinetics Corp and Orica Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orica Ltd ADR and Crown Electrokinetics 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 Crown Electrokinetics Corp are associated (or correlated) with Orica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orica Ltd ADR has no effect on the direction of Crown Electrokinetics i.e., Crown Electrokinetics and Orica go up and down completely randomly.

Pair Corralation between Crown Electrokinetics and Orica

Given the investment horizon of 90 days Crown Electrokinetics Corp is expected to under-perform the Orica. In addition to that, Crown Electrokinetics is 2.97 times more volatile than Orica Ltd ADR. It trades about -0.26 of its total potential returns per unit of risk. Orica Ltd ADR is currently generating about 0.06 per unit of volatility. If you would invest  1,050  in Orica Ltd ADR on December 28, 2024 and sell it today you would earn a total of  103.00  from holding Orica Ltd ADR or generate 9.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	76.67%
Values	Daily Returns

Crown Electrokinetics Corp  vs.  Orica Ltd ADR

Crown Electrokinetics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crown Electrokinetics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals 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.

Orica Ltd ADR

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Orica Ltd ADR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent fundamental indicators, Orica showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crown Electrokinetics and Orica

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

The idea behind Crown Electrokinetics Corp and Orica Ltd ADR 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.