Correlation Between Orion Group and Matrix Service

Can any of the company-specific risk be diversified away by investing in both Orion Group and Matrix Service 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 Matrix Service 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 Matrix Service Co, you can compare the effects of market volatilities on Orion Group and Matrix Service 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 Matrix Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orion Group and Matrix Service.

Diversification Opportunities for Orion Group and Matrix Service

0.25

Correlation Coefficient

Orion Group  Matrix Service

Modest diversification

The 3 months correlation between Orion and Matrix is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Orion Group Holdings and Matrix Service Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matrix Service 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 Matrix Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matrix Service has no effect on the direction of Orion Group i.e., Orion Group and Matrix Service go up and down completely randomly.

Pair Corralation between Orion Group and Matrix Service

Considering the 90-day investment horizon Orion Group Holdings is expected to generate 1.65 times more return on investment than Matrix Service. However, Orion Group is 1.65 times more volatile than Matrix Service Co. It trades about -0.05 of its potential returns per unit of risk. Matrix Service Co is currently generating about -0.13 per unit of risk. If you would invest  750.00  in Orion Group Holdings on November 29, 2024 and sell it today you would lose (60.00) from holding Orion Group Holdings or give up 8.0% of portfolio value over 90 days.

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

Orion Group Holdings  vs.  Matrix Service Co

Orion Group Holdings

Risk-Adjusted Performance

Very Weak

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

Matrix Service

Risk-Adjusted Performance

Weak

Over the last 90 days Matrix Service Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Matrix Service is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Orion Group and Matrix Service

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

The idea behind Orion Group Holdings and Matrix Service Co 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.