Correlation Between Orion Engineered and Symrise Ag

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

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

Diversification Opportunities for Orion Engineered and Symrise Ag

-0.27

Correlation Coefficient

Orion Engineered  Symrise Ag

Very good diversification

The 3 months correlation between Orion and Symrise is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Orion Engineered Carbons and Symrise Ag PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symrise Ag PK and Orion Engineered 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 Orion Engineered Carbons are associated (or correlated) with Symrise Ag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symrise Ag PK has no effect on the direction of Orion Engineered i.e., Orion Engineered and Symrise Ag go up and down completely randomly.

Pair Corralation between Orion Engineered and Symrise Ag

Considering the 90-day investment horizon Orion Engineered Carbons is expected to under-perform the Symrise Ag. In addition to that, Orion Engineered is 3.22 times more volatile than Symrise Ag PK. It trades about -0.03 of its total potential returns per unit of risk. Symrise Ag PK is currently generating about -0.07 per unit of volatility. If you would invest  2,962  in Symrise Ag PK on September 5, 2024 and sell it today you would lose (284.00) from holding Symrise Ag PK or give up 9.59% of portfolio value over 90 days.

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

Orion Engineered Carbons  vs.  Symrise Ag PK

Orion Engineered Carbons

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Orion Engineered Carbons are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Orion Engineered exhibited solid returns over the last few months and may actually be approaching a breakup point.

Symrise Ag PK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Symrise Ag PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Orion Engineered and Symrise Ag

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

The idea behind Orion Engineered Carbons and Symrise Ag PK 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.