Correlation Between Orbit Garant and Xtract One

Can any of the company-specific risk be diversified away by investing in both Orbit Garant and Xtract One 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 Xtract One 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 Xtract One Technologies, you can compare the effects of market volatilities on Orbit Garant and Xtract One 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 Xtract One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orbit Garant and Xtract One.

Diversification Opportunities for Orbit Garant and Xtract One

-0.14

Correlation Coefficient

Orbit Garant  Xtract One

Good diversification

The 3 months correlation between Orbit and Xtract is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Orbit Garant Drilling and Xtract One Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtract One Technologies 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 Xtract One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtract One Technologies has no effect on the direction of Orbit Garant i.e., Orbit Garant and Xtract One go up and down completely randomly.

Pair Corralation between Orbit Garant and Xtract One

Assuming the 90 days trading horizon Orbit Garant Drilling is expected to generate 0.31 times more return on investment than Xtract One. However, Orbit Garant Drilling is 3.25 times less risky than Xtract One. It trades about -0.09 of its potential returns per unit of risk. Xtract One Technologies is currently generating about -0.04 per unit of risk. If you would invest  86.00  in Orbit Garant Drilling on October 6, 2024 and sell it today you would lose (4.00) from holding Orbit Garant Drilling or give up 4.65% of portfolio value over 90 days.

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

Orbit Garant Drilling  vs.  Xtract One Technologies

Orbit Garant Drilling

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Orbit Garant Drilling are ranked lower than 12 (%) 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.

Xtract One Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtract One Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Orbit Garant and Xtract One

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

The idea behind Orbit Garant Drilling and Xtract One 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.