Correlation Between Feat Fund and Orbit Technologies

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

By analyzing existing cross correlation between Feat Fund Investments and Orbit Technologies, you can compare the effects of market volatilities on Feat Fund and Orbit Technologies 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 Feat Fund with a short position of Orbit Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feat Fund and Orbit Technologies.

Diversification Opportunities for Feat Fund and Orbit Technologies

0.29

Correlation Coefficient

Feat Fund  Orbit Technologies

Modest diversification

The 3 months correlation between Feat and Orbit is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Feat Fund Investments and Orbit Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbit Technologies and Feat Fund 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 Feat Fund Investments are associated (or correlated) with Orbit Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbit Technologies has no effect on the direction of Feat Fund i.e., Feat Fund and Orbit Technologies go up and down completely randomly.

Pair Corralation between Feat Fund and Orbit Technologies

Assuming the 90 days trading horizon Feat Fund Investments is expected to under-perform the Orbit Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Feat Fund Investments is 2.15 times less risky than Orbit Technologies. The stock trades about -0.1 of its potential returns per unit of risk. The Orbit Technologies is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  234,400  in Orbit Technologies on September 2, 2024 and sell it today you would earn a total of  40,600  from holding Orbit Technologies or generate 17.32% return on investment over 90 days.

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

Feat Fund Investments  vs.  Orbit Technologies

Feat Fund Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Feat Fund Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Feat Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Orbit Technologies

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Orbit Technologies are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Orbit Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Feat Fund and Orbit Technologies

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

The idea behind Feat Fund Investments and Orbit Technologies 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.