Correlation Between New Zealand and Orbit Garant
Can any of the company-specific risk be diversified away by investing in both New Zealand 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 New Zealand and Orbit Garant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Zealand Energy and Orbit Garant Drilling, you can compare the effects of market volatilities on New Zealand 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 New Zealand with a short position of Orbit Garant. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Zealand and Orbit Garant.
Diversification Opportunities for New Zealand and Orbit Garant
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between New and Orbit is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding New Zealand Energy 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 New Zealand 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 New Zealand Energy 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 New Zealand i.e., New Zealand and Orbit Garant go up and down completely randomly.
Pair Corralation between New Zealand and Orbit Garant
Given the investment horizon of 90 days New Zealand Energy is expected to under-perform the Orbit Garant. In addition to that, New Zealand is 2.35 times more volatile than Orbit Garant Drilling. It trades about -0.15 of its total potential returns per unit of risk. Orbit Garant Drilling is currently generating about 0.18 per unit of volatility. If you would invest 78.00 in Orbit Garant Drilling on December 18, 2024 and sell it today you would earn a total of 36.00 from holding Orbit Garant Drilling or generate 46.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
New Zealand Energy vs. Orbit Garant Drilling
Performance |
Timeline |
New Zealand Energy |
Orbit Garant Drilling |
New Zealand and Orbit Garant Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with New Zealand and Orbit Garant
The main advantage of trading using opposite New Zealand and Orbit Garant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Zealand 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.New Zealand vs. Ramp Metals | New Zealand vs. Pace Metals | New Zealand vs. Mako Mining Corp | New Zealand vs. Calibre Mining Corp |
Orbit Garant vs. Foraco International SA | Orbit Garant vs. Geodrill Limited | Orbit Garant vs. Major Drilling Group | Orbit Garant vs. Mccoy Global |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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