Correlation Between Orient Telecoms and URU Metals

Can any of the company-specific risk be diversified away by investing in both Orient Telecoms and URU Metals 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 Orient Telecoms and URU Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Orient Telecoms and URU Metals, you can compare the effects of market volatilities on Orient Telecoms and URU Metals 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 Orient Telecoms with a short position of URU Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Telecoms and URU Metals.

Diversification Opportunities for Orient Telecoms and URU Metals

-0.09

Correlation Coefficient

Orient Telecoms  URU Metals

Good diversification

The 3 months correlation between Orient and URU is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Orient Telecoms and URU Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on URU Metals and Orient Telecoms 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 Orient Telecoms are associated (or correlated) with URU Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of URU Metals has no effect on the direction of Orient Telecoms i.e., Orient Telecoms and URU Metals go up and down completely randomly.

Pair Corralation between Orient Telecoms and URU Metals

If you would invest  15,000  in URU Metals on October 23, 2024 and sell it today you would earn a total of  0.00  from holding URU Metals or generate 0.0% return on investment over 90 days.

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

Orient Telecoms  vs.  URU Metals

Orient Telecoms

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orient Telecoms has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Orient Telecoms is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

URU Metals

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in URU Metals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, URU Metals may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Orient Telecoms and URU Metals

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

The idea behind Orient Telecoms and URU Metals 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.