Correlation Between Orbit Technologies and Global Knafaim

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

By analyzing existing cross correlation between Orbit Technologies and Global Knafaim Leasing, you can compare the effects of market volatilities on Orbit Technologies and Global Knafaim 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 Global Knafaim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orbit Technologies and Global Knafaim.

Diversification Opportunities for Orbit Technologies and Global Knafaim

0.72

Correlation Coefficient

Orbit Technologies  Global Knafaim

Poor diversification

The 3 months correlation between Orbit and Global is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Orbit Technologies and Global Knafaim Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Knafaim Leasing 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 Global Knafaim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Knafaim Leasing has no effect on the direction of Orbit Technologies i.e., Orbit Technologies and Global Knafaim go up and down completely randomly.

Pair Corralation between Orbit Technologies and Global Knafaim

Assuming the 90 days trading horizon Orbit Technologies is expected to generate 1.21 times less return on investment than Global Knafaim. But when comparing it to its historical volatility, Orbit Technologies is 1.45 times less risky than Global Knafaim. It trades about 0.23 of its potential returns per unit of risk. Global Knafaim Leasing is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  5,720  in Global Knafaim Leasing on September 3, 2024 and sell it today you would earn a total of  1,310  from holding Global Knafaim Leasing or generate 22.9% 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.  Global Knafaim Leasing

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.

Global Knafaim Leasing

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global Knafaim Leasing are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Global Knafaim sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Orbit Technologies and Global Knafaim

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

The idea behind Orbit Technologies and Global Knafaim Leasing 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.