Correlation Between Orca and MTL

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

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

Diversification Opportunities for Orca and MTL

0.87

Correlation Coefficient

Orca  MTL

Very poor diversification

The 3 months correlation between Orca and MTL is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Orca and MTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTL and Orca 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 Orca are associated (or correlated) with MTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTL has no effect on the direction of Orca i.e., Orca and MTL go up and down completely randomly.

Pair Corralation between Orca and MTL

Assuming the 90 days trading horizon Orca is expected to under-perform the MTL. In addition to that, Orca is 1.71 times more volatile than MTL. It trades about -0.05 of its total potential returns per unit of risk. MTL is currently generating about -0.05 per unit of volatility. If you would invest  86.00  in MTL on May 7, 2025 and sell it today you would lose (12.00) from holding MTL or give up 13.95% of portfolio value over 90 days.

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

Orca  vs.  MTL

Orca

Risk-Adjusted Performance

Very Weak

Over the last 90 days Orca has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for Orca shareholders.

MTL

Risk-Adjusted Performance

Very Weak

Over the last 90 days MTL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for MTL shareholders.

Pair Trading with Orca and MTL

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

The idea behind Orca and MTL 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.