Correlation Between KDA and Orbit Garant

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

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

Diversification Opportunities for KDA and Orbit Garant

-0.55

Correlation Coefficient

KDA  Orbit Garant

Excellent diversification

The 3 months correlation between KDA and Orbit is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding KDA Group and Orbit Garant Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbit Garant Drilling and KDA 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 KDA Group are associated (or correlated) with Orbit Garant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbit Garant Drilling has no effect on the direction of KDA i.e., KDA and Orbit Garant go up and down completely randomly.

Pair Corralation between KDA and Orbit Garant

Assuming the 90 days horizon KDA Group is expected to generate 1.67 times more return on investment than Orbit Garant. However, KDA is 1.67 times more volatile than Orbit Garant Drilling. It trades about 0.05 of its potential returns per unit of risk. Orbit Garant Drilling is currently generating about 0.06 per unit of risk. If you would invest  20.00  in KDA Group on September 25, 2024 and sell it today you would earn a total of  9.00  from holding KDA Group or generate 45.0% return on investment over 90 days.

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

KDA Group  vs.  Orbit Garant Drilling

KDA Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KDA Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, KDA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Orbit Garant Drilling

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Orbit Garant Drilling are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Orbit Garant displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KDA and Orbit Garant

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

The idea behind KDA Group and Orbit Garant Drilling 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.