Correlation Between 0x and Orbs
Can any of the company-specific risk be diversified away by investing in both 0x and Orbs 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 0x and Orbs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 0x and Orbs, you can compare the effects of market volatilities on 0x and Orbs 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 0x with a short position of Orbs. Check out your portfolio center. Please also check ongoing floating volatility patterns of 0x and Orbs.
Diversification Opportunities for 0x and Orbs
Very weak diversification
The 3 months correlation between 0x and Orbs is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding 0x and Orbs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbs and 0x 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 0x are associated (or correlated) with Orbs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbs has no effect on the direction of 0x i.e., 0x and Orbs go up and down completely randomly.
Pair Corralation between 0x and Orbs
Assuming the 90 days trading horizon 0x is expected to under-perform the Orbs. In addition to that, 0x is 1.2 times more volatile than Orbs. It trades about -0.23 of its total potential returns per unit of risk. Orbs is currently generating about -0.19 per unit of volatility. If you would invest 4.35 in Orbs on February 6, 2024 and sell it today you would lose (0.83) from holding Orbs or give up 19.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
0x vs. Orbs
Performance |
| Timeline |
| 0x |
| Orbs |
0x and Orbs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 0x and Orbs
The main advantage of trading using opposite 0x and Orbs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 0x position performs unexpectedly, Orbs 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 Orbs will offset losses from the drop in Orbs' long position.The idea behind 0x and Orbs 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.Check out your portfolio center.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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |