Correlation Between Victory Supermarket and Orbit Technologies

Can any of the company-specific risk be diversified away by investing in both Victory Supermarket and Orbit Technologies 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 Victory Supermarket and Orbit Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Victory Supermarket Chain and Orbit Technologies, you can compare the effects of market volatilities on Victory Supermarket and Orbit Technologies 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 Victory Supermarket with a short position of Orbit Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Supermarket and Orbit Technologies.

Diversification Opportunities for Victory Supermarket and Orbit Technologies

-0.56

Correlation Coefficient

Victory Supermarket  Orbit Technologies

Excellent diversification

The 3 months correlation between Victory and Orbit is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Victory Supermarket Chain and Orbit Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbit Technologies and Victory Supermarket 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 Victory Supermarket Chain are associated (or correlated) with Orbit Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbit Technologies has no effect on the direction of Victory Supermarket i.e., Victory Supermarket and Orbit Technologies go up and down completely randomly.

Pair Corralation between Victory Supermarket and Orbit Technologies

Assuming the 90 days trading horizon Victory Supermarket Chain is expected to under-perform the Orbit Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Victory Supermarket Chain is 1.09 times less risky than Orbit Technologies. The stock trades about -0.28 of its potential returns per unit of risk. The Orbit Technologies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  298,000  in Orbit Technologies on December 31, 2024 and sell it today you would earn a total of  25,000  from holding Orbit Technologies or generate 8.39% return on investment over 90 days.

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

Victory Supermarket Chain  vs.  Orbit Technologies

Victory Supermarket Chain

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victory Supermarket Chain has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Orbit Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Orbit Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Orbit Technologies may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Victory Supermarket and Orbit Technologies

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

The idea behind Victory Supermarket Chain and Orbit Technologies 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.