Correlation Between Orbit Technologies and Ashot Ashkelon

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

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

Diversification Opportunities for Orbit Technologies and Ashot Ashkelon

0.66

Correlation Coefficient

Orbit Technologies  Ashot Ashkelon

Poor diversification

The 3 months correlation between Orbit and Ashot is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Orbit Technologies and Ashot Ashkelon Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashot Ashkelon Industries and Orbit Technologies 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 Technologies are associated (or correlated) with Ashot Ashkelon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashot Ashkelon Industries has no effect on the direction of Orbit Technologies i.e., Orbit Technologies and Ashot Ashkelon go up and down completely randomly.

Pair Corralation between Orbit Technologies and Ashot Ashkelon

Assuming the 90 days trading horizon Orbit Technologies is expected to generate 1.58 times less return on investment than Ashot Ashkelon. But when comparing it to its historical volatility, Orbit Technologies is 2.62 times less risky than Ashot Ashkelon. It trades about 0.23 of its potential returns per unit of risk. Ashot Ashkelon Industries is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  340,900  in Ashot Ashkelon Industries on September 3, 2024 and sell it today you would earn a total of  92,100  from holding Ashot Ashkelon Industries or generate 27.02% return on investment over 90 days.

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

Orbit Technologies  vs.  Ashot Ashkelon Industries

Orbit Technologies

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Orbit Technologies are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Orbit Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Ashot Ashkelon Industries

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ashot Ashkelon Industries are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ashot Ashkelon sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Orbit Technologies and Ashot Ashkelon

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

The idea behind Orbit Technologies and Ashot Ashkelon Industries 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.