Correlation Between Orapi SA and Moulinvest

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

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

Diversification Opportunities for Orapi SA and Moulinvest

-0.75

Correlation Coefficient

Orapi SA  Moulinvest

Pay attention - limited upside

The 3 months correlation between Orapi and Moulinvest is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Orapi SA and Moulinvest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moulinvest and Orapi SA 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 Orapi SA are associated (or correlated) with Moulinvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moulinvest has no effect on the direction of Orapi SA i.e., Orapi SA and Moulinvest go up and down completely randomly.

Pair Corralation between Orapi SA and Moulinvest

Assuming the 90 days trading horizon Orapi SA is expected to generate 0.05 times more return on investment than Moulinvest. However, Orapi SA is 19.42 times less risky than Moulinvest. It trades about 0.21 of its potential returns per unit of risk. Moulinvest is currently generating about -0.06 per unit of risk. If you would invest  646.00  in Orapi SA on September 16, 2024 and sell it today you would earn a total of  4.00  from holding Orapi SA or generate 0.62% return on investment over 90 days.

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

Orapi SA  vs.  Moulinvest

Orapi SA

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Orapi SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Orapi SA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Moulinvest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moulinvest has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Moulinvest is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Orapi SA and Moulinvest

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

The idea behind Orapi SA and Moulinvest 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.