Correlation Between Orbit Technologies and Hod Assaf

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

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

Diversification Opportunities for Orbit Technologies and Hod Assaf

-0.52

Correlation Coefficient

Orbit Technologies  Hod Assaf

Excellent diversification

The 3 months correlation between Orbit and Hod is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Orbit Technologies and Hod Assaf Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hod Assaf 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 Hod Assaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hod Assaf Industries has no effect on the direction of Orbit Technologies i.e., Orbit Technologies and Hod Assaf go up and down completely randomly.

Pair Corralation between Orbit Technologies and Hod Assaf

Assuming the 90 days trading horizon Orbit Technologies is expected to generate 1.37 times more return on investment than Hod Assaf. However, Orbit Technologies is 1.37 times more volatile than Hod Assaf Industries. It trades about 0.18 of its potential returns per unit of risk. Hod Assaf Industries is currently generating about -0.05 per unit of risk. If you would invest  296,368  in Orbit Technologies on December 19, 2024 and sell it today you would earn a total of  53,332  from holding Orbit Technologies or generate 18.0% return on investment over 90 days.

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

Orbit Technologies  vs.  Hod Assaf Industries

Orbit Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Orbit Technologies are ranked lower than 14 (%) 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.

Hod Assaf Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hod Assaf Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Hod Assaf is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Orbit Technologies and Hod Assaf

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

The idea behind Orbit Technologies and Hod Assaf 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.

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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.