Correlation Between Exponent and Orion Group

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

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

Diversification Opportunities for Exponent and Orion Group

-0.39

Correlation Coefficient

Exponent  Orion Group

Very good diversification

The 3 months correlation between Exponent and Orion is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Exponent 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 Exponent 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 Exponent 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 Exponent i.e., Exponent and Orion Group go up and down completely randomly.

Pair Corralation between Exponent and Orion Group

Given the investment horizon of 90 days Exponent is expected to under-perform the Orion Group. But the stock apears to be less risky and, when comparing its historical volatility, Exponent is 2.22 times less risky than Orion Group. The stock trades about -0.11 of its potential returns per unit of risk. The Orion Group Holdings is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  557.00  in Orion Group Holdings on October 24, 2024 and sell it today you would earn a total of  287.00  from holding Orion Group Holdings or generate 51.53% return on investment over 90 days.

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

Exponent  vs.  Orion Group Holdings

Exponent

Risk-Adjusted Performance

0 of 100

Very Weak

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

Orion Group Holdings

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Orion Group Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Orion Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exponent and Orion Group

The main advantage of trading using opposite Exponent and Orion Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exponent 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 Exponent 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.