Correlation Between Orion Group and Agrify Corp

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

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

Diversification Opportunities for Orion Group and Agrify Corp

0.7

Correlation Coefficient

Orion Group  Agrify Corp

Poor diversification

The 3 months correlation between Orion and Agrify is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Orion Group Holdings and Agrify Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrify Corp and Orion Group 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 Orion Group Holdings are associated (or correlated) with Agrify Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrify Corp has no effect on the direction of Orion Group i.e., Orion Group and Agrify Corp go up and down completely randomly.

Pair Corralation between Orion Group and Agrify Corp

Considering the 90-day investment horizon Orion Group is expected to generate 11.57 times less return on investment than Agrify Corp. But when comparing it to its historical volatility, Orion Group Holdings is 3.67 times less risky than Agrify Corp. It trades about 0.11 of its potential returns per unit of risk. Agrify Corp is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  354.00  in Agrify Corp on August 31, 2024 and sell it today you would earn a total of  5,101  from holding Agrify Corp or generate 1440.96% return on investment over 90 days.

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

Orion Group Holdings  vs.  Agrify Corp

Orion Group Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Orion Group Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Orion Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Agrify Corp

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Agrify Corp are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Agrify Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Orion Group and Agrify Corp

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

The idea behind Orion Group Holdings and Agrify Corp 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.