Correlation Between Orbit Garant and Black Mammoth

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

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

Diversification Opportunities for Orbit Garant and Black Mammoth

0.38

Correlation Coefficient

Orbit Garant  Black Mammoth

Weak diversification

The 3 months correlation between Orbit and Black is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Orbit Garant Drilling and Black Mammoth Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Mammoth Metals and Orbit Garant 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 Orbit Garant Drilling are associated (or correlated) with Black Mammoth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Mammoth Metals has no effect on the direction of Orbit Garant i.e., Orbit Garant and Black Mammoth go up and down completely randomly.

Pair Corralation between Orbit Garant and Black Mammoth

Assuming the 90 days trading horizon Orbit Garant Drilling is expected to generate 0.57 times more return on investment than Black Mammoth. However, Orbit Garant Drilling is 1.76 times less risky than Black Mammoth. It trades about 0.19 of its potential returns per unit of risk. Black Mammoth Metals is currently generating about 0.06 per unit of risk. If you would invest  58.00  in Orbit Garant Drilling on September 29, 2024 and sell it today you would earn a total of  26.00  from holding Orbit Garant Drilling or generate 44.83% return on investment over 90 days.

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

Orbit Garant Drilling  vs.  Black Mammoth Metals

Orbit Garant Drilling

Risk-Adjusted Performance

14 of 100

Good

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

Black Mammoth Metals

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Black Mammoth Metals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Black Mammoth showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Orbit Garant and Black Mammoth

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

The idea behind Orbit Garant Drilling and Black Mammoth Metals 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.