Correlation Between Orca Energy and Boat Rocker

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

By analyzing existing cross correlation between Orca Energy Group and Boat Rocker Media, you can compare the effects of market volatilities on Orca Energy and Boat Rocker 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 Orca Energy with a short position of Boat Rocker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orca Energy and Boat Rocker.

Diversification Opportunities for Orca Energy and Boat Rocker

0.0

Correlation Coefficient

Orca Energy  Boat Rocker

Pay attention - limited upside

The 3 months correlation between Orca and Boat is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Orca Energy Group and Boat Rocker Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boat Rocker Media and Orca Energy 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 Orca Energy Group are associated (or correlated) with Boat Rocker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boat Rocker Media has no effect on the direction of Orca Energy i.e., Orca Energy and Boat Rocker go up and down completely randomly.

Pair Corralation between Orca Energy and Boat Rocker

Assuming the 90 days trading horizon Orca Energy Group is expected to generate 0.11 times more return on investment than Boat Rocker. However, Orca Energy Group is 9.42 times less risky than Boat Rocker. It trades about -0.05 of its potential returns per unit of risk. Boat Rocker Media is currently generating about -0.03 per unit of risk. If you would invest  6,659  in Orca Energy Group on October 22, 2024 and sell it today you would lose (559.00) from holding Orca Energy Group or give up 8.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.74%
Values	Daily Returns

Orca Energy Group  vs.  Boat Rocker Media

Orca Energy Group

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Orca Energy Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Orca Energy is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Boat Rocker Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boat Rocker Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Orca Energy and Boat Rocker

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

The idea behind Orca Energy Group and Boat Rocker Media 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.