Correlation Between Orion Group and VINCI SA

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

Diversification Opportunities for Orion Group and VINCI SA

-0.74

Correlation Coefficient

Orion Group  VINCI SA

Pay attention - limited upside

The 3 months correlation between Orion and VINCI is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Orion Group Holdings and VINCI SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VINCI SA 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 VINCI SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VINCI SA has no effect on the direction of Orion Group i.e., Orion Group and VINCI SA go up and down completely randomly.

Pair Corralation between Orion Group and VINCI SA

Considering the 90-day investment horizon Orion Group Holdings is expected to generate 1.55 times more return on investment than VINCI SA. However, Orion Group is 1.55 times more volatile than VINCI SA. It trades about 0.06 of its potential returns per unit of risk. VINCI SA is currently generating about 0.01 per unit of risk. If you would invest  298.00  in Orion Group Holdings on October 10, 2024 and sell it today you would earn a total of  421.00  from holding Orion Group Holdings or generate 141.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	78.59%
Values	Daily Returns

Orion Group Holdings  vs.  VINCI SA

Orion Group Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Orion Group Holdings are ranked lower than 9 (%) 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.

VINCI SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VINCI SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Orion Group and VINCI SA

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

The idea behind Orion Group Holdings and VINCI SA 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.